Lesson: Auditing Accounts Receivable

In this lesson, the focus is on auditing accounts receivable, specifically addressing the assertions of existence, completeness, occurrence, and valuation, allocation, and accuracy. The lesson highlights the importance of sending confirmations as a way to verify the existence and occurrence of accounts receivable, while acknowledging that confirmations may not help with the completeness assertion. The lesson also explains how auditing accounts receivable involves tracing sales transactions to the specific listing of AR and emphasizes the importance of reviewing customer credit ratings with delinquent accounts in order to evaluate the true net realizable value of the receivables listed on the balance sheet. This valuable information will help in understanding the audit process and procedures in relation to accounts receivable balances.