Auditing Accounts Receivable - Focusing Procedures for Testing Existence and Valuation 3 CPE

Accounts receivable tend to carry a higher risk of material misstatement due to the complexity and subjectivity involved with initial recognition, subsequent measurement, and valuation. In addition, revenue recognition is presumed to be a significant fraud risk. This module will explain tips and best practice techniques for auditing common accounts receivable risks, primarily focusing on existence and valuation.

Major Topics:

• Typical risks of material misstatement related to accounts receivable
• Practice tailoring the detailed audit plan to the assessed risk of material misstatement
• Overview of more complex issues, such as methods for converting accounts receivable to cash
• External confirmation audit considerations, including evaluating responses for propriety
• Evaluating the valuation of accounts receivable

Prerequisites

No advanced preparation or prerequisites are required for this course.
Designed For: Accountants with responsibilities for auditing accounts receivable.

Learning Objective

• Discover and discuss typical audit risks and special audit considerations related to accounts receivable.
• Recognize and explain how to tailor a detailed audit plan to the assessed risk of material misstatement.
• Identify and evaluate external confirmation responses for propriety.
• Explore and evaluate allowance for doubtful accounts for proper valuation.

Last updated/reviewed: June 27, 2024