Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions and Details of Balances for Accounts Receivable

May 7, 2026

Upload by Eliana

Audit planning and execution for the sales and collection cycle focuses on tests of controls and substantive tests of transactions, with specific attention to cash receipts and the evidence supporting account balances. The content outlines the audit objectives, the structure of control-testing procedures for sales and collections, and the approach to auditing cash receipt transactions, including reconciliation of cash receipts to bank deposits. It further explains the methodology for designing tests of details of balances for accounts receivable, including detection-risk planning, confirmation as the primary procedure, and satisfying nine balance-related audit objectives such as existence, completeness, accuracy, cutoff, realizable value, rights and obligations, and presentation and disclosure. It also details the initial steps using the A/R schedule and an aged trial balance to ensure tie-in to the general ledger and master file.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages15

Reading Time38 min

AccessFree to download

May 7, 2026

Upload by Eliana