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Peach Blossom Cologne Company

Accounts Receivable - Aged Trial Balance


12-31-09
(Prepared by client)
Confirmation Subsequent
Customer Current 30-60 60-90 Over Total Mailed Collection Comments by Credit
1-30 days Days Days 90 Days Manager--
Alpha Aroma 1150 900 2050 2050 2050 Customer did not report any error in outstanding AR balance despite it already paying all the outstanding AR balance.
Anne Charlotte Cosmetics 30900 1450 32350 0 32350 Confirmation mailed by customer is correct. Client's AR balance is incorrect. Anne Charlotte has already paid the amount outstanding at the end of 2009 of $32,350.
Bobell Beauty Supplies 1460 1460 1460 0 AR balance is correct.
Body Bar 2100 800 1050 3950 3950 1850 Customer did not report any error in outstanding AR balance despite it already paying a portion of the outstanding AR balance.
Capital Odors 1200 1200 1200 0 AR balance is correct.
Cut-Rate Discount Stores 2380 1720 400 4500 4500 1800 Customer did not report any error in outstanding AR balance despite it already paying a portion of the outstanding AR balance.
Darings 35500 7600 43100 7100 36000 Confirmation mailed by customer is correct. Client's AR balance is incorrect. Darings has already paid $36,000, leaving only $7,100 amount of AR outstanding.
Frankies Floral Frag. 20400 20400 20400 0 Confirmation mailed by customer is correct. And client's balance of AR is also correct.
Incense, Inc. 6300 600 6900 6900 6000 Customer did not report any error in outstanding AR balance despite it already paying all the outstanding AR balance.
Janis Department Stores 4600 1150 5750 5750 5200 Customer did not report any error in outstanding AR balance despite it already paying a portion of the outstanding AR balance.
Lone Star Supply 3290 3290 3290 3290 Customer did not report any error in outstanding AR balance despite it already paying all the outstanding AR balance.
Rausch's Dept. Store 2700 1250 3950 3950 3950 Customer did not report any error in outstanding AR balance despite it already paying all the outstanding AR balance.
Tears and Doefall Co. 75450 75450 75450 70000 Confirmation mailed by customer and client's AR balance are both incorrect. Customer has already paid $70,000, leaving only $5,450 amount of AR outstanding.
William's Fragrances 1850 1850 1850 0 AR balance is correct.
Young and Beautiful 24350 24350 6350 18000 Confirmation mailed by customer is correct. Client's AR balance is incorrect. Customer has already paid $18,000, leaving only $6.350 amount of AR outstanding.
Various Other Acct's. 4830 4830 4830 0 AR balance is correct.
Per client 211200 20380 2600 1200 235380 149030 180490
AUDIT PROGRAM
Generalized Evidence-
Substantive Tests of
No. Audit Objectives Potential Risks / Errors Gathering Audit
Transactions
Procedures
1 Existence or - Occurence of unauthorized sales transactions
- Sales figures and - Account for a sequence of
Occurrence (All of the - Occurence of unauthorized write-offs
account
of receivables
receivable sales invoices
recorded account examination, after that - Review sales journal and
receivable transactions match them with source master file for unusual
exist) documents (Vouching) transactions and amounts
- Pick a sample of source - Trace sales journal entries to
documents and trace supporting documents, including
forward to verifiy that the bill of lading, duplicate sales
transactions related to invoice, sales order, and
accounts receivable exist customer order
(Tracing) - Observe suprise count
- Computation of sales
and receivables amounts
and ratio analysis
(Analytical Procedures)
- Send confirmation letter
to related customers
(Positive and Negative
Confrmation)
2 Completeness (All - Goods may have been shipped but- not
Send
billed
confirmation
to the customer
letter Trace selected shipping
account receivable is - Sales may have been billed to the customer
to related but
customers
not shipped documents to the sales journal to
included in the balance - Merchandise may have been sold to
(Confirmation)
customers who were badensure credit that
risksevery transaction is
sheet) - Account receivable included
figure and sales
examination (Vouching)
- Contact the related
customers (Verbal
Inquiry)
- Pick a sample of
related source
documents (e.g. delivery
order, shipping notice)
and compare it to master
file (Tracing)
- Cut-off test (sales
register and shipping
records)
3 Rights and Obligations Sales may have been recorded in - Take a sample of - Compare date of recording of
(The accounts the wrong fiscal year related source sale in sales journal with
receivable are bona documents (e.g. delivery duplicate sales invoice and bill of
fide claims owed the order, shipping notice) lading
company) and compare it to master - Foot and cross-foot the sales
file (Tracing) journal and trace totals to the
- Compare sales and general ledger
accounts receivable - Trace a sample of sales
figures with prior years invoices from sales journal to
(Analytical Procedures) accounts receivable master file
- Check whether there and test for amount, date, and
are any goods in invoice number
consignment
- Pledge any collateral
goods
4 Valuation or Allocation Having incorrect recorded sales amount
- Perform recalculation of - Trace entries in sales journal to sales invoices
(The accounts sales transactions on - Recompute prices on sales invoices
receivable are aging receivable
collectible in the (Recalculation)
normal course of - Compare the
business) recalculation result with
sales figure (Analytical
Procedures)

5 Presentation and Sales may have been posted to the -wrong


Review
account
of account Examine duplicate sales invoice for appropriate account classification
Disclosure (Pledged receivable figures to
accounts receivable or ensure that they are
accounts receivable properly classified
used as collateral are (Scanning)
disclosed and - Disclose any
Receivables from troublesome collectability
directors, officers, and
affiliates are
separately disclosed)