How do an Auditor verify Book Debts | Audit Procedure

Guidelines for Verification of Book debts by Auditor

Verification of Book Debts - Audit Procedure

Verification of Book Debts – Audit Procedure

While verifying book debts, an auditor should follow the following procedure.

1. The auditor should obtain the list of debtors duly certified by the responsible official and scrutinize its accuracy.

2. He should obtain the confirmation letters of the statement of accounts directly from debtors and the same should be verified to check the actual existence of debtors. He should pay special attention to those balances for which confirmations are not available.

3. The sales ledger balance should be checked with the Debtor’s Ledger, Sales Book, Sales Returns Book, Cash Book, etc.

4. He should see that the book debt balances do not include the amounts due in respect of goods out on sale or return basis.

5. He should see that the book debts shown in the Balance Sheets are recoverable.

6. He should obtain a duly certified statement classifying between good debts, secured debts, unsecured debts, current debts, bad and doubtful debts, and debts outstanding for a period exceeding six months.

7. He should see that adequate provision has been made for bad and doubtful debts.

8. In the case of company accounts the auditor should see that its debtors are classified as prescribed by the Companies Act of 1956 and shown in the Balance Sheet in the same order.

Leave a Reply

This site uses Akismet to reduce spam. .




Recent Posts


Related pages


systematic random sampling advantages and disadvantagesbill receivable meaningfranchising definition marketingfutures stock market definitionas 2 valuation of inventoriesimportance of probability samplingquota sampling is an example of probability samplingthe most difficult part of the capital budgeting process ismixed economy in economicsidbi establishedwhat is the difference between void and voidable contractcentralization of authority definitionmerits of fdidifference between managerial and financial accountingdepositories actequity gearing formulaiou accountingdormant partnercapital gearing ratio formulameaning of wager in hinditypes of organizational structure advantages and disadvantagesformula npvplanned economy disadvantageslist of venture capitalist in indiamixed economy examples countriescentralization and decentralization in managementtarget costing accountingrules for precis writingmeaning of amalgationmeaning of mechanisationwhat does departmentalization meanwhat is the meaning of sole tradertypes of auditors opinionsdisadvantages of computerized accounting systemflexible budget definitiondrawbacks of ratio analysiswarehousing meaningmerits of mixed economydishonor definitionautocratic leadership advantages and disadvantagesdisclosed and undisclosed principalcentralization and decentralization in organizationdistinguish between selling and marketing conceptwhat is meant by privity of contractdefine précishow to dissolve a partnershipdecentralized purchasing systeme commerce advantages and disadvantages for customersreceivables turnover rationaverage stock turnover perioddefinition of alphanumeric keyswhy tqm is importantadvantages and disadvantages of delegation in managementnorminal damagestypes of currency swapsformal and informal groups examplespayout ratio meaningimportance of advertising budgetcriticism of taylorismmaterial yield variance formuladisadvantage of irradvantages and disadvantages of a capitalist economydisadvantages of purposive samplinginductive and deductive methodtypes of mergers and acquisitions with examples pptfunction of rbidisadvantages of outdoor advertisingabsoprtion costingcalculating turnover ratiooutright purchase meaningdefine stratified sampling