Practical Aspects Regarding the Auditing of Accounts Receivable and Advance Payments

Author:Assistant, PhD Student Adrian GROŞANU



Keywords:accounts receivable audit, audit procedures, audit risk, representative

The objective of the financial statements’ audit is to assist the auditor in the process of issuing an opinion regarding the financial statements, if they are drawn up, under all significant aspects, in accordance with the financial reporting framework in force. \r\nThe objective set for auditing the sale-outstanding cycle that generates receivables is to determine if the balance account of the accounts involved in the cycle’s operations are fairly presented, according to the financial reporting framework in force.\r\nIn order to conduct the auditing of accounts receivable and advance payments it is compulsory to know the client, the accounting system and the internal control system that are being used. When auditing the sale and cash-in operations detail, tests on transactions are being conducted along with control tests and analytical procedures. When auditing accounts receivable the auditor uses analytical procedures and detail tests regarding the balance accounts while the sales final balance account is audited through analytical procedures. All these audit procedures are designed to lead to conclusive and adequate audit evidence on which the conclusions, representing the foundation of the auditor’s decision, are based. \r\n