FUNDAMENTALS OF AUDITING ACC 311 Lec 21 to 25

Lesson 21

SUBSTANTIVE PROCEDURES

Auditing

Auditor’s Opinion (depends upon)

Reasonable Assurance (depends upon)

Sufficient Appropriate Audit evidence

(depends upon)

Audit procedures

» Test of Control

» Substantive Procedures

Test of Control

The auditor is required to perform tests of controls:

• Test of details

• Analytical procedures

• When

the internal controls are operating effectively or

• When substantive procedures alone do not provide sufficient appropriate audit evidence at the

assertion level.

Tests of controls comprise of testing three things:

1. Design – that the internal controls are properly designed to cover the risk it is meant for.

2. Implementation – that the internal controls have been put into operation.

3. Operating effectiveness – that the systems of internal control were operating effectively at

relevant times during the period.

How to perform test of control

• Testing the Design:

– Proper design of internal control is tested through ICQs and ICEC.

• Testing the Implementation:

– Implementation of internal control is tested through walk through test with a little sample

size.

• Testing the Operating effectiveness:

– Here the test is performed through a compliance test based on a judgmental sample.

Substantive Procedures

Substantive procedures are performed in order to detect material misstatements at the assertion level (like;

occurrence, completeness, accuracy, valuation, existence, rights and control), and include tests of details of

classes of transactions, account balances and disclosures and substantive analytical procedures.

The auditor plans and performs substantive procedures to be responsive to the related assessment of the

risk of material misstatement.

Irrespective of the assessment of risk of material misstatement, the auditor should design and perform

substantive procedures for each material class of transactions, account balance, and disclosure.

The auditor’s substantive procedures should include the following audit procedures related to the financial

statement closing process:

• Agreeing the financial statements to the underlying accounting records; and

• Examining material journal entries and other adjustments made during the course of preparing

the financial statements.

When the auditor has determined that an assessed risk of material misstatement at the assertion level is a

significant risk, the auditor should perform substantive procedures that are specifically responsive to that

risk.

Types of Substantive Procedures

• Test of details

– Land Registry

– Debtors Circular

– Building rent Deed/Agreement

• Analytical procedures

– Payroll Turnover ratio

Comparing with previous

month’s salary

– Production Cost Comparing with the number of

units produced

Comparing with the previous month’s

cost of production

Nature of Substantive Procedures

Substantive analytical procedures are applied on large volume of transactions, which are predictable over

time.

• Tests of details are ordinarily more appropriate to obtain audit evidence regarding certain assertions

about account balances, including existence and valuation.

• Analytical procedures are applied on large volume of transactions, which are predictable over time.

(cost of goods sold, payroll, sale)

In designing substantive analytical procedures, the auditor considers such matters as the following:

• The suitability

of using analytical procedures given the assertions.

If controls, over sales order processing, are weak; the auditor may place more reliance on tests of details

rather than substantive analytical procedures for assertions related to debtors.

When auditing the collectibility of accounts receivable, the auditor may apply substantive analytical

procedures to an aging of customers’ accounts in addition to tests of details on subsequent cash receipts.

• The reliability

of the data;

In determining whether data is reliable for purposes of designing substantive analytical procedures, the

auditor considers the following:

o Information is ordinarily more reliable when it is obtained from independent sources outside the

entity

o Comparability of the information available

o Nature and relevance of the information available (whether budgets have been established as

results to be expected rather than as goals to be achieved.

o Controls over the preparation of the information (controls over the preparation, review and

maintenance of budgets)

• Whether the expectation is sufficiently precise

to identify a material misstatement at the desired level of

assurance.

For this the auditor considers the following facts:

i. The accuracy with which the expected results of substantive analytical procedures can be

predicted (comparison of GP ratio should be consistent rather than the ratio of discretionary

expenses like entertainment)

ii. The degree to which information can be disaggregated (effective analysis will be of a component

not of the entity as a whole)

iii. The availability of the information, both financial and non financial (budgets are financial,

whereas units of production are non financial)

• The amount of any difference in recorded amounts

from expected values that is acceptable.

Depends upon the:

i. materiality

ii. Possibility of misstatement in the specific account balance, class of transactions, or disclosure

Timing of Substantive Procedures

YEAR END SUBSTANTIVE PROCEDURES ARE ALWAYS MORE RELIABLE

When substantive procedures are performed at an interim date, the auditor should perform further

substantive procedures or substantive procedures combined with tests of controls to cover the remaining

period that provide a reasonable basis for extending the audit conclusions from the interim date to the

period end.

In considering whether to perform substantive procedures at an interim date the auditor considers such

factors as the following:

• The control environment and other relevant controls. (Like payroll disbursement)

• The availability of information at a later date that is necessary for the auditor’s procedures (prov for

doubtful debts can be investigated interim but debtor and inventory can be verified at the year end).

• The objective of the substantive procedure.

• The assessed risk of material misstatement (prefer always at year end).

• The nature of the class of transactions or account balance and related assertions (like frequency of

occurrence of the transactions e.g. salaries are paid monthly whereas bonuses are paid annually).

• The ability of the auditor to perform appropriate substantive procedures or substantive procedures

combined with tests of controls to cover the remaining period in order to reduce the risk that

misstatements that exist at period end are not detected (staffing problem that cannot make the

auditor able to extend till the year end)

If substantive procedures are performed at an interim date, the auditor may sometimes consider applying

tests of controls also on the transactions of remaining period while extending his substantive procedures

from interim date to the period end.

In situations of actual or expected fraud, auditor may prefer applying substantive procedures at period end.

If misstatements are detected in classes of transactions or account balances at an interim date, the auditor

ordinarily modifies the related assessment of risk and the planned nature, timing or extent of the substantive

procedures covering the remaining period.

Substantive procedures applied in a prior period are not sufficient to address a risk of material misstatement

in the current year except in certain circumstances.

Extent of performance of substantive procedures

Greater the risk of material misstatement due to weaknesses in the system of internal control, the greater

would be the risk of material misstatement in the financial statements.

In designing tests of details, the auditor may use either audit sampling or may choose to select items to be

tested by some other selective means of testing.

Adequacy of Presentation and Disclosure

The auditor should perform audit procedures to evaluate whether the overall presentation of the financial

statements, including the related disclosures, are in accordance with the applicable financial reporting

framework.

Assertions in obtaining Audit Evidence

(a) Assertions about classes of transactions

and events for the period under audit;

i. Occurrence – transactions and events that have been recorded have occurred and pertain

to the entity;

ii. Completeness – all transactions and events that should have been recorded have been

recorded;

iii. Accuracy – amounts and other data relating to recorded transactions and events have been

recorded appropriately.

iv. Cutoff – transactions and events have been recorded in the proper period.

v. Classification – transactions and events have been recorded in the proper accounts.

(b) Assertions about account balances

at the period end.

i. Existence – assets, liabilities, and equity interests exist;

ii. Rights and obligations – the entity holds or controls the rights to assets, and liabilities are

the obligations of the entity;

iii. Completeness – all assets, liabilities and equity interests that should have been recorded

have been recorded;

iv. Valuation and allocation – assets, liabilities, and equity interests are included in the financial

statements at appropriate amounts and any resulting valuation or allocation adjustments

are appropriately recorded.

i. Occurrence and rights and obligations – disclosed events, transactions and other matters

have occurred and pertain to the entity;

ii. Completeness – all disclosures that should have been included in the financial statements

have been included;

iii. Classification and understandability – financial information is appropriately presented and

described, and disclosures are clearly expressed;

iv. Accuracy and valuation – financial and other information are disclosed fairly and at

appropriate amounts.

Audit Procedures for obtaining Audit Evidence

The auditor uses one or more types of audit procedures described below:

(i) Inspection of Records or Documents

It consists of examining records or documents whether internal or external, in paper form, electronic form,

or other media. Inspection provides evidence of varying degrees of reliability depending on their nature and

source and in the case of internal records, on effectiveness of controls over their production.

(ii) Inspection of Tangible Assets

It consists of physical examination of the assets. It may provide reliable audit evidence of their existence

cannot necessarily about other assertions.

(iii) Inquiry

It means seeking information of knowledgeable persons throughout the entity or outside the entity. Those

may be formal written or informal oral. It provides an auditor with new information or corroborative

evidences. It may also bring to high information different from the one possessed by the auditor. Certain

oral inquiries might be got confirmed through written representations.

(iv) Confirmations

It is a specific type of inquiry. It is the process of obtaining a representation of information or an existing

condition directly from a third party. Confirmations are sought from debtors, creditors, bankers, legal

advisors etc.

Lesson 22

AUDIT EVIDENCE

Auditor should obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on

which to base the audit opinion.

Concept of Audit Evidence

Audit evidence is all the information used by the auditor in arriving at the conclusions on which his opinion

is based and includes the information contained in the accounting records underlying the financial

statements and other information. It is obtained from audit procedures performed during the course of

audit and may include audit evidence obtained from other sources such as pervious audits and a firm’s

quality control procedures for client acceptance and continuance.

Accounting records generally include the records of initial entries and supporting records, such as checks

and records of electronic fund transfers; invoices; contracts; the general and subsidiary ledgers, journal

entries and other adjustments to the financial statements that are not reflected in formal cost allocations,

computations, reconciliations and disclosures. The entries in the accounting records are often initiated,

recorded, processed and reported in the electronic form. In addition, the accounting records may be part of

integrated systems that share data and support all aspects of the entity’s financial reporting, operations and

compliance objectives.

Auditor obtains most of the audit evidence from accounting records of the entity. If accounting records do

not provide sufficient audit evidence, the auditor obtains other audit evidence.

Other information that the auditor may use as audit evidence includes:

• minutes of meetings;

• confirmations from third parties,

• analysis’ reports;

• comparable data about competitors (benchmarking);

• controls manuals;

• information obtained by the auditor from such audit procedures as inquiry, observation; and

inspection;

• and other information developed by, or available to, the auditor that permits the auditor to reach

conclusions through valid reasoning.

Sufficient appropriate Audit Evidence

Sufficiency: The measure of quantity of audit evidence.

Appropriateness: The measure of quality i.e. relevance and reliability in providing support of

detecting misstatements in account balance classes of transactions and disclosures and relevant assertions.

The quantity of audit evidence needed is affected by:

- the risk of misstatement (the greater the risk, the more audit evidence is likely to be required); and

- the quality of such audit evidence (the higher the quality, the less may be required).

Accordingly sufficiency and appropriateness are interrelated. However, merely obtaining more audit

evidence may not compensate for its poor quality.

Audit evidence obtained through same audit procedures may be relevant to certain assertions but not

relevant to other assertions.

The auditor often obtains evidence about an assertion from different sources or of different nature.

Evidence about an assertion is not a substitute for evidence regarding another assertion.

Sources of obtaining Audit Evidence

i) Internal source - through accounting system, management, employees, underlying documentation

etc.

ii) External source - third parties, i.e. suppliers, customers bankers legal advisers and other parties

who have knowledge of the enterprise.

Nature of Audit Evidence

i) Visual

ii) Oral

iii) Documentary

Reliability of Audit Evidence - Generalizations

Following generalizations are considered useful in assessing the reliability of audit evidence (subject to

certain important exceptions):

i) Audit evidence obtained from independent sources outside the entity is more reliable.

ii) Evidence generated internally is more reliable when related controls are effective.

iii) Evidence obtained by an auditor directly is more reliable than that obtained indirectly or by

interference e.g. Bank balance confirmation certificate received by an auditor is more reliable than the bank

statement obtained from the management or observation of a control rather than making inquiry about the

application of a control.

iv) Written evidence is more reliable than oral representation.

v) Audit evidence provided by original documents is more reliable than that provided by

photocopies and facsimiles.

Other factors relating to Audit Evidence

i) Information on which audit procedures are based should be sufficiently accurate and

complete. Therefore, auditor should also test the system for generating such information

while using it for his procedures.

ii) Auditor’s reliance increases when audit evidence obtained from one source is consistent

with another source; if it is inconsistent further procedures may be performed.

iii) Cost of obtaining the audit evidence is also considered when obtaining it.

iv) While forming an audit opinion, the auditor does not have to examine all the items or

obtain all the evidences which might be available. He can reach a conclusion by examining

a sample of such transactions. He also relies on persuasive evidences. However, if evidence

is less than persuasive, he does not consider it reliable.

Assertions in obtaining Audit Evidence

(a) Assertions about classes of transactions and events for the period under audit;

(i) Occurrence – transactions and events that have been recorded have occurred and

pertain to the entity;

(ii) Completeness – all transactions and events that should have been recorded have

been recorded;

(iii) Accuracy – amounts and other data relating to recorded transactions and events

have been recorded appropriately.

(iv) Cutoff – transactions and events have been recorded in the proper period.

(v) Classification – transactions and events have been recorded in the proper

accounts.

(b) Assertions about account balances at the period end.

(i) Existence – assets, liabilities, and equity interests exist;

(ii) Rights and obligations – the entity holds or controls the rights to assets, and

liabilities are the obligations of the entity;

(iii) Completeness – all assets, liabilities and equity interests that should have been

recorded have been recorded;

(iv) Valuation and allocation – assets, liabilities, and equity interests are included in the

financial statements at appropriate amounts and any resulting valuation or

allocation adjustments are appropriately recorded.

(i) Occurrence and rights and obligations – disclosed events, transactions and other

matters have occurred and pertain to the entity;

(ii) Completeness – all disclosures that should have been included in the financial

statements have been included;

(iii) Classification and understandability – financial information is appropriately

presented and described, and disclosures are clearly expressed;

(iv) Accuracy and valuation – financial and other information are disclosed fairly and

at appropriate amounts.

Audit procedures for obtaining audit evidence

Auditor performs audit procedures to obtain an understanding of the entity, its environment and to assess

risks of material misstatement. Procedures are also applied to test operating effectiveness of internal

controls and for detection of material misstatements at assertion level.

The auditor always performs risk assessment procedures to provide a satisfactory basis for assessment of

risks at financial statement level. In addition to these risk assessment procedures, which alone are not

sufficient, the auditor performs audit procedures in the form of tests of control and substantive procedures.

Tests of controls are applied when auditor expects to rely on operating controls. Through tests of controls,

he tests the controls to support the risk assessment. These are also applied when substantive procedures

alone do not provide sufficient appropriate audit evidence.

Nature and timing of audit procedures may be affected by the entity’s data retention policies or their

practice to convert source documents into computer images through scanning, means of communication

being used by the entity e.g. electronic messaging rather than written purchase orders.

The auditor uses one or more types of audit procedures described below:

(i) Inspection of Records or Documents

It consists of examining records or documents whether internal or external, in paper form,

electronic form, or other media. Inspection provides evidence of varying degrees of reliability

depending on their nature and source and in the case of internal records, on effectiveness of

controls over their production.

(ii) Inspection of Tangible Assets

It consists of physical examination of the assets. It may provide reliable audit evidence of their

existence cannot necessarily about other assertions.

(iii) Inquiry

It means seeking information of knowledgeable persons throughout the entity or outside the entity.

Those may be formal written or informal oral. It provides an auditor with new information or

corroborative evidences. It may also bring to high information different from the one possessed by

the auditor. Certain oral inquiries might be got confirmed through written representations.

(iv) Confirmations

It is a specific type of inquiry. It is the process of obtaining a representation of information or an

existing condition directly from a third party. Confirmations are sought from debtors, creditors,

bankers, legal advisors etc.

(v) Recalculation

It consists of checking the mathematical accuracy of documents or records. It can be performed

through use of information technology.

(vi) Re-performance

It is the auditor’s independent execution of procedures or controls that were originally performed

as part of the entity’s internal control, either manually or through the use of CAATs, for example,

re-performing the aging of accounts receivable.

(vii) Analytical procedures

It consists of evaluations of financial information made by a study of plausible relationship among

both financial and non-financial data. It includes investigation of significant fluctuations found and

the relationship that are inconsistent.

Lesson 23

SUFFICIENT APPROPRIATE AUDIT EVIDENCE

AND

TESTING THE SALES SYSTEM

Recap:

Audit evidence includes: the information contained in the accounting records underlying the financial

statements.

Audit evidence might include:

• Documents (invoices, credit notes, cash receipts)

• Accounting entries (write down to NRV, depreciation)

• Answers from the management (Provisions)

• Information from third parties (banks, debtors)

• Computations (depreciation, accruals, provisions)

• Observations (inventory count)

Sufficiency: The measure of quantity of audit evidence.

Appropriateness: The measure of quality i.e. relevance

and reliability of audit evidence.

Key questions for the auditor to consider therefore will be:

1. Do I have enough evidence to reach a conclusion on this audit area?

2. Is the evidence that I have, reliable enough to, allow me to reach a conclusion on this area of the

audit?

Assertions in obtaining Audit Evidence

(a) Assertions about classes of transactions

and events for the period under audit;

i. Occurrence – transactions and events that have been recorded have occurred and pertain

to the entity;

ii. Completeness – all transactions and events that should have been recorded have been

recorded (accruals & depreciation);

iii. Accuracy – amounts and other data relating to recorded transactions and events have been

recorded appropriately. (valuation and estimations)

iv. Cutoff – transactions and events have been recorded in the proper period.

v. Classification – transactions and events have been recorded in the proper accounts.

(b) Assertions about account balances

at the period end.

i. Existence – assets, liabilities, and equity interests exist;

ii. Rights and obligations – the entity holds or controls the rights to assets, and liabilities are

the obligations of the entity;

iii. Completeness – all assets, liabilities and equity interests that should have been recorded

have been recorded;

iv. Valuation and allocation – assets, liabilities, and equity interests are included in the financial

statements at appropriate amounts and any resulting valuation or allocation adjustments

are appropriately recorded.

i. Occurrence and rights and obligations – disclosed events, transactions and other matters

have occurred and pertain to the entity;

ii. Completeness – all disclosures that should have been included in the financial statements

have been included;

iii. Classification and understandability – financial information is appropriately presented and

described, and disclosures are clearly expressed;

iv. Accuracy and valuation – financial and other information are disclosed fairly and at

appropriate amounts.

Audit procedures for obtaining Audit Evidence

The auditor uses one or more types of audit procedures described below:

(i) Inspection of Records or Documents

It consists of examining records or documents whether internal or external, in paper form,

electronic form, or other media. Inspection provides evidence of varying degrees of reliability

depending on their nature and source and in the case of internal records, on effectiveness of

controls over their production.

(ii) Inspection of Tangible Assets

It consists of physical examination of the assets. It may provide reliable audit evidence of their

existence cannot necessarily about other assertions.

(iii) Inquiry

It means seeking information of knowledgeable persons throughout the entity or outside the entity.

Those may be formal written or informal oral. It provides an auditor with new information or

corroborative evidences. It may also bring to high information different from the one possessed by

the auditor. Certain oral inquiries might be got confirmed through written representations.

(iv) Confirmations

It is a specific type of inquiry. It is the process of obtaining a representation of information or an

existing condition directly from a third party. Confirmations are sought from debtors, creditors,

bankers, legal advisors etc.

(v) Recalculation

It consists of checking the mathematical accuracy of documents or records. It can be performed

through use of information technology.

(vi) Re-performance

It is the auditor’s independent execution of procedures or controls that were originally performed

as part of the entity’s internal control, either manually or through the use of CAATs, for example,

reperforming the aging of accounts receivable.

(vii) Analytical procedures

It consists of evaluations of financial information made by a study of plausible relationship among

both financial and non-financial data. It includes investigation of significant fluctuations found and

the relationship that are inconsistent.

TESTING THE SALES SYSTEM

Control Objectives

For many businesses, sales are made on credit and so objectives for the sales cycle includes control debtors

as well.

These control objectives include:

a) Customers' orders should be authorized, controlled and recorded in order to execute them

promptly

b) Goods shipped and work completed should be controlled to ensure that invoices are issued and

revenue recorded for all sales.

c) Goods returned and claims by customers (for example, in respect of damaged goods) should be

controlled in order to determine the liability for goods returned and claims received. .

d) Invoices and credits should be appropriately checked for accuracy and should be authorized before

being entered in the receivables' records.

e) Authorized customer transactions, and only those transactions, should be accurately entered in the

accounting records.

f) There should be procedures to ensure that sales invoices are subsequently paid by customers and

that doubtful amounts are identified in order to determine any provisions or write offs required

Control procedures over sales and debtors

There are a large number of controls that may be required in the sales cycle due to the importance of this

area in any business and the possible opportunities that exist for diverting sales and cash receipts away from

the business.

Typical control procedures at key stages of the sales cycle are:

1. Orders

2. Dispatch

3. Invoicing and credit notes

4. Returns inwards

5. Receivables

6. Bad Debts

(a) Orders

(i) Existing customers should be allocated a credit limit and it should be ascertained whether this limit

is to be exceeded if the new order is accepted. If so the matter should be referred to credit control.

(ii) Any new customer should be referred to the credit control department before the order is accepted.

(iii) All orders received should be recorded on pre-numbered sales order documents so that a check can

be made that all orders have been dealt with -a completeness check.

(iv) All orders should be authorized before any goods are dispatched.

(v) The sales order document should be used to produce a dispatch note for the goods outwards

department. No goods may be dispatched without a dispatch note.

(b) Dispatch

(i) Dispatch notes should be pre-numbered and a register kept of them to enable them to be matched

with relate to sales invoices and customer orders.

(ii) Dispatch notes should be authorized before goods leave the company.

(iii) Regular checks should be made to ensure that all dispatches have been invoiced.

(i) Sales invoices should be authorized by a responsible official and matched with the authorized order

and dispatch note.

(ii) All invoices and credit notes should be entered In daybook records, the sales ledger, and sales

ledger control account. Batch totals should be maintained for this purpose.

(iii) Sales invoices and credit notes should be checked for prices. casts and calculations by a person

other than the one preparing the invoice.

(iv) All invoices and credit notes should be serially pre-numbered and regular sequence checks should

be carried out.

(v) Credit notes should be authorized by someone unconnected with dispatch or sales ledger functions.

(vi) Copies of cancelled invoices should be retained.

(vii) Any cancellation of an invoice should lead to a cancellation of the related dispatch note.

(viii) Cancelled (and free of charge) invoices should be signed by a responsible official.

(ix) Each invoice should distinguish between different types of sales and, if relevant, different rates of

VAT or sales tax. Any coding of invoices should be periodically checked independently

(d) Returns

(i) Any goods returned by the customer should be checked for obvious damage and, when accepted. a

document should be raised.

(ii) All goods returned should be used to prepare appropriate credit notes

(e) Receivables/Debtors

(i) A receivables ledger control account should be prepared regularly and checked to individual sales

ledger balances by an Independent official.

(ii) Receivables ledger personnel should be independent of dispatch and cash receipt functions.

(iii) Statements should be sent regularly to customers.

(iv) Formal procedures should exist for following up overdue debts which should be highlighted either

by the preparation of an aged list of balances or by the preparation of regular customer statements.

(v) Letters should be sent to customers for collection of overdue debts. A policy should be in place for

the Institution of legal proceeds where appropriate.

f) Bad debts

(i) The authority to write off a bad debt should be in writing. Appropriate adjustments should be

made to the sales ledger and the control account

(ii) The use of court action or the writing-off of a bad debt should be authorised by an official

independent of the cash receipt function.

Tests of Control

Tests of control should be designed to check that the control procedures are being applied and that

objectives are being achieved. Tests may be appropriate under the following broad headings.

(a) Carry out sequence test checks on invoices, credit notes, dispatch notes and orders. Ensure that all

items are included and that there are no omissions or duplications.

(b) Check the existence of evidence for authorization in respect of:

i. acceptance of the order (the creditworthiness check)

ii. dispatch of goods

iii. raising of the invoice or credit note

iv. pricing and discounts

v. write-off of bad debts.

Check both that the relevant signature exists and that the control has been applied.

i. invoices, including pricing, and VAT and sales tax calculations

ii. credit notes,

This is often done by means of a 'grid stamp' containing several signatures on the face of the document.

Ensure that the control has been applied by checking the accuracy of such invoices and credit notes.

(d) Check dispatch notes and goods returned notes to ensure that they are matched with invoices and

credit notes.

(e) Check that control account reconciliations have been performed and reviewed.

In all cases, tests should be performed on a sample basis.

Lesson 24

TESTING THE SALES SYSTEM

Control Objectives

For many businesses, sales are made on credit and so objectives for the sales cycle includes control debtors

as well.

These control objectives include:

a) Customers' orders should be authorized, controlled and recorded in order to execute them

promptly

b) Goods shipped and work completed should be controlled to ensure that invoices are issued and

revenue recorded for all sales.

c) Goods returned and claims by customers (for example, in respect of damaged goods) should be

controlled in order to determine the liability for goods returned and claims received. .

d) Invoices and credits should be appropriately checked for accuracy and should be authorized before

being entered in the receivables' records.

e) Authorized customer transactions, and only those transactions, should be accurately entered in the

accounting records.

f) There should be procedures to ensure that sales invoices are subsequently paid by customers and

that doubtful amounts are identified in order to determine any provisions or write offs required

Control Procedures over Sales and Debtors