Question

Which of the following assertions: Existence/Occurrence, Valuation/Allocation, Completeness, Presentation, and Disclosure relate to these audit procedures?

1)Trace beginning balance for accounts receivable and to the prior year's working papers

2)Determine whether there are credit balances that are significant in the aggregate that should be reclassified as liabilities

3)Send confirmations to entities that have purchased accounts receivable

4)Review activity in the general ledger account for accounts receivable and investigate entries that appear unusual in amount or source

5)Use generalized audit software to recompute the aging of accounts receivable and investigate the credit history of accounts that are 60 days past due

6)Observe that all cash received through the close of business on the last day of the fiscal year is included in cash on hand or deposits in transit and that no receipts of the subsequent period are included

Answer 1

Solution
	Audit procedure	Assertions	Reason of ascertainment
	1)Trace beginning balance for accounts receivable and to the prior year's working papers	1) Existence/occurrence	whether opening balances are due to the occurrence of the previous period?
		2)Valuation/Allocation	whether the correct amount carried forward in the next accounting period?
		3) disclosure	Whether disclosed under the correct customer account to which these are related?
	2)Determine whether there are credit balances that are significant in the aggregate that should be reclassified as liabilities	1) Existence/occurrence	Whether such balances are existing?
		2)Valuation/Allocation	whether such balances are of significant amount?
		3) Presentation	whether they need to be presented as a liability?
	3)Send confirmations to entities that have purchased accounts receivable	1) Existence/occurrence	Whether such balances are existing or not?
		2)Valuation/Allocation	whether such balances are of the correct amount, not false balances are recorded?
		3) Presentation	whether confirmations are as per the requirement of audit?
	4)Review activity in the general ledger account for accounts receivable and investigate entries that appear unusual in amount or source	1) Existence/occurrence	Whether such transactions occur or not?
		2)Valuation/Allocation	whether such transactions are recorded with the correct amount and recorded under the correct account?
		3)Completeness	whether such a transaction recorded in that period in which these related
		4) Disclosure	whether disclosed under proper head and account?
	5)Use generalized audit software to recompute the aging of accounts receivable and investigate the credit history of accounts that are 60 days past due	1)Valuation/Allocation	how aged the account receivables are?
		2) Presentation	whether account receivable classified and presented as per the age of receivables?
	6)Observe that all cash received through the close of business on the last day of the fiscal year is included in cash on hand or deposits in transit and that no receipts of the subsequent period are included	1) Existence/occurrence	Whether cash actually received?
		2)Completeness	whether all transactions are recorded or not? whether recorded in the previous fiscal year or not, those transactions relating to that period only?
		3) Disclosure	Whether disclosed under proper head or not