The audit working papers often include a client-prepared, aged trial balance of accounts receivable as at balance date.This ageing is best used by the auditor to:
A)test the accuracy of recorded sales.
B)assess control risk for credit sales.
C)verify the existence of the recorded receivables.
D)test the valuation and allocation assertion of accounts receivable.

Question

Quizplus · Accepted Answer

The aged trial balance of accounts receivable is best used by the auditor to test the valuation and allocation assertion of accounts receivable. The audit procedures involve reviewing the ageing classification of accounts receivable to ensure that it agrees with the company's credit terms and that appropriate provisions have been made for doubtful debts. The auditor also tests the accuracy of the calculations and reviews the supporting information for credit balances. This helps to ensure that the financial statements reflect the accurate value of accounts receivable.

The Audit Working Papers Often Include a Client-Prepared, Aged Trial