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Audit Procedures: EO RO C EO C EO C EO C EO

The document outlines audit procedures for testing the Interest Receivable account of an agency. It details steps to confirm balances, trace amounts to prior years and records, analyze aging schedules and turnover rates, evaluate allowance calculations, and ensure proper presentation and disclosure in financial statements.

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Aaliyah
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42 views4 pages

Audit Procedures: EO RO C EO C EO C EO C EO

The document outlines audit procedures for testing the Interest Receivable account of an agency. It details steps to confirm balances, trace amounts to prior years and records, analyze aging schedules and turnover rates, evaluate allowance calculations, and ensure proper presentation and disclosure in financial statements.

Uploaded by

Aaliyah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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NAME OF AGENCY

AUDIT PROGRAM
FOR THE PERIOD ________________

INTEREST RECEIVABLE
( Account Code 129)

Account Description: The account Interest Receivable is used to record the amount
of interest earned and due from short term/long term investments.

Audit Objectives:

1. To determine whether interest receivable represents valid claims of the agency.


2. To determine whether all receivables are owned by the agency as of balance sheet
date.
3. To determine whether all valid receivables are completely and properly recorded.
4. To determine whether the related allowance for doubtful accounts is reasonably
provided.
5. To determine whether the account is properly presented and disclosed in the
financial statements.

Assertions: Existence or Occurrence ( EO ), Rights and Obligation ( RO ) ,


Completeness ( C ), Valuation or Measurement ( VM ), Validity/Legality or
Regularity ( VR ), Presentation and Disclosure ( PD ).

TIME
ASSERTION

AUDIT FRAME
TO
WP
FS

PROCEDURES Ref
BE
DONE REMARKS
BY DATE DATE
STARTED COMPLETED

1.1 Confirm individual balances on a test EO


basis. (See confirmation procedures RO
for the steps to be followed.)
1.2 Trace the beginning balance appearing C
in the GL to prior year’s working EO
paper.

1.3 Obtain aging schedule of the account C


as of balance sheet date. EO

1.4 Check the details of the schedule C


against the subsidiary ledgers (SL). EO
1.5 Verify the correctness of postings in C
the SL through the General Journal EO
(GJ) to the Journal Entry Voucher
(JEV).

1.6 Check totals of the GL, SL and C


schedule. EO
TIME

ASSERTION
AUDIT FRAME
TO
WP

FS
PROCEDURES Ref
BE
DONE REMARKS
BY DATE DATE
STARTED COMPLETED

2.1 Examine selected debits and credits C


after balance sheet date to determine EO
whether there are unrecorded VM
interests receivable and collections
for the year under audit but were
erroneously taken up in the
subsequent year.

For credits to the account:

Trace postings to the JEV, Report of


Collections and Deposit (RCD) and
Cash Receipts Journal (CRJ)/GJ.
2.2 Review the entries in the GL. C
EO
For debits to the account:

Trace postings to the SL, JEV,


supporting documents.

Examine individual source C


documents such as promissory notes, EO
loan contracts, investment documents VR
or other related documents for: RO

 Regularity
 Authorization and approval
 Validity
 Accuracy

3.1 Perform analytical procedures like


accounts receivable turnover. C
Compute the turnover of receivables VR
and compare it with that of the VM
preceding year indicating averages.
Obtain explanation from agency for
unusually low turnover rate.

Analyze the aging schedule of C


debtors’ balances as of balance sheet EO
date. Take note of long outstanding, VR
dormant and unusually large balances RO
in the accounts. VM

4.2 Analyze the entry recording the C


current year’s provisions and the EO
procedures used by the client in VM
computing the allowance for doubtful
accounts.
TIME

ASSERTION
AUDIT FRAME
TO
WP

FS
PROCEDURES Ref
BE
DONE REMARKS
BY DATE DATE
STARTED COMPLETED

4.3 Where provisions are made by the use C


of formula based on the aged listing, EO
determine by reference to the details VR
of the agency’s procedures whether VM
the basis is:

a. consistent with prior years;


b. appropriate to the circumstances
of the business; and
c. in accordance with the accounting
policy.

Trace bad debts expense to the C


general ledger. EO

Check accuracy of agency’s C


computation of bad debts. VM

Evaluate the reasonableness of the C


basis of allowance for doubtful EO
accounts, loss experience of prior VR
year, data on subsequent collections RO
VM

collections, opinion of credit manager


and collection lawyers, results of
circularization, and other pertinent
information.
Review individual balances and age C
of accounts and evaluate accounts EO
that should be written off. RO
Obtain and examine list of debts C
written off during the year. EO
Check totals in the list and verify C
whether debts written off are no EO
longer included as part of receivable. RO

Check whether the list of debts C


written off is properly kept and EO
controlled.

Inquire if continuous follow up is C


made on debts written off and check EO
whether there are collections received RO
and these are properly accounted for.
5.1 Check the propriety of the presentation C
of the account. See that it conforms VR
to the provisions of the NGAS.

5.2 Check whether adequate disclosure has PD


been made in the financial statements.
TIME

ASSERTION
AUDIT FRAME
TO
WP

FS
PROCEDURES Ref
BE
DONE REMARKS
BY DATE DATE
STARTED COMPLETED

5.3 Take note of all discrepancies and


prepare AOM.

PREPARED BY : REVIEWED BY : APPROVED BY :

Date Date Date

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