Auditing · Receivables Audit Procedures
During the audit of trade receivables, if a customer (Willow Co) circularisation response shows a difference due to payment made before the year-end but received by the client post year-end, which of the following is the most appropriate audit procedure?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Agree the payment to the post year-end cash book and bank statement.✓
- 2Discuss with management and include the full amount in the allowance for doubtful receivables.
- 3Agree the balance directly to the pre year-end purchase invoice of the client.
- 4No further audit procedures are required as the difference is fully reconciled.
Correct answer
Agree the payment to the post year-end cash book and bank statement.
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