Audit ProgramTrade debts

Audit Program (h)        Trade debts		WP Ref.:
		Prepared by:
		Date:
		Reviewed by
		Date
Client:
Period:
Subject:	Trade debts

		Amount in Rs.
Account balances:
Trade debts
Classes of transactions:

S. No.	Audit Objectives	Assertions	Risk Assessment
			IR	CR	ROSM
1.	Trade debts are completely and accurately recorded	CA
2.	All recorded trade debts actually exist.	E
3.	Trade debts are appropriately valued.	V
4.	Trade debts recorded are owned by the client.	R
5.	Trade debts are presented and all disclosures have been given in accordance with the Fourth Schedule of the Companies Ordinance, 1984 and relevant IASs.	OCAL RVU

S. No.	Audit Procedures	Objective	Done by	W. P. Ref.
Test of Controls
1.	Assess the reasonableness of design of system of internal control by enquiring relevant client personnel and documenting the same (if not a documented system manual has been developed by the client). A walk through test would be necessary to confirm the understanding as documented. Identify the preventive (exercised before incurrence of transactions and event) and detective (exercised after incurrence of transactions and event) controls established by management to support its assertions.	ALL
2.	Check on sample of selected transactions covering the whole period that all preventive controls are exercised on all transactions.	ALL
3.	Check that proper party wise subsidiary ledger has been maintained and entries are made in the same on prompt and consistent basis and the same is reconciled with general ledger.	ALL
4.	Check on a sample of transactions that detective controls are appropriately been exercised and in case of any detection of error/ fraud, proper steps have been taken to avoid recurrence of the same.	CE
5.	Ensure that management does not override the designed controls by n          Enquiring from the designated staff person n          Remain skeptical during performing test of design and test of effective operation
6.	Document the conclusion after performing test of controls and required level of assurance from substantive procedures.	N/A

S. No.	Audit Procedures	Objective	Done by	W. P. Ref.
Analytical Procedures
1.	Assess the appropriateness of discount and credit policy in view of the flow of economic benefits.	U
2.	Check the reasonableness of impairment expense.	CAL
3.	Document logical commercial reasons for major balances' additions and deletions made during the year	AU
4.	Compare current year balances and expense with last year balances and ensure that any significant variation should be properly and logically reasoned.	CEA
Test of Details
1.	Obtain a party-wise movement schedule and trace the opening balances from the general ledger, subsidiary records, and last year working papers. Check casting and cross casting of the schedule.	CE
2.	Make a selection of customers' balances and circularize confirmations of selected parties. Compare replies to requests. Ensure that reconciling items, if any, are properly supported and appropriately adjusted.	EVR
3.	Check subsequent clearance.	ER
4.	Inquire into significant disputed balances, if any.	V
5.	Obtain a movement schedule of allowance for doubtful debts and ensure completeness.	C
6.	Obtain aging of debtors and ensure that no unreasonably delayed balances are appearing.