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Calculate the accounts receivable turnover

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Reference no: EM132680615

Question - Listed below are ten substantive procedures:

1. Select a sample of non-current assets and sight them.

2. Review the income statement for unusual differences in the balances recorded for this year and last year.

3. Select a sample of invoices and ensure that they have been properly recorded in the sales ledger.

4. Trace the last inventory received before the year-end to the inventory listing.

5. Review the adequacy of the company's allowance for doubtful debts.

6. Ensure that interest paid on the bank loan is correct by multiplying the interest rate by the outstanding principal for each month of the year.

7. Send a letter to the bank to confirm a loan taken out by the company during the year.

8. Attend the year-end stocktake and perform test counts on a sample of stock items.

9. Review all invoices received for one month after the year-end to ensure that they do not relate to the current year.

10. Calculate the accounts receivable turnover and compare with previous year's turnover.

(a) For each test, indicate what Type of Substantive Audit Procedure to which it relates (Analytical Review, Tests of details of Balances, or Tests of details of Transactions).

(b) Give ONE assertion to which each test relates.

Reference no: EM132680615

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