When the client's rights to accounts receivable are limited, this can be detected by:

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Confirming with banks can reveal if the client has pledged their accounts receivable as collateral for a loan, while inquiries of the financial controller and reviewing minutes of director's meetings can provide information on any restrictions or limitations on the client's rights to accounts receivable. Therefore, all of these methods should be used to detect if the client's rights to accounts receivable are limited.

When the Client's Rights to Accounts Receivable Are Limited, This