The following are the eight balance-related audit objectives, six tests of details of balances for accounts receivable, and seven tests of controls orsubstantive tests of transactions for the sales and collection cycle:Balance-Related Audit ObjectiveDetail tie-in Classification Existence Cutoff
Completeness
Realizable value
Accuracy RightsTest of Details of Balances, Test of Control, or Substantive Test of Transactions AuditProcedure1. Confirm accounts receivable ending balances and sales terms, such as right of return andconsignment arrangements.
2. Review sales returns after the balance sheet date to determine whether any are applicableto the current year.
3. Compare dates on shipping documents with the sales journal throughout the year.
4. Perform alternative procedures for nonresponses to confirmations.
5. Examine sales transactions for related-party or employee sales recorded as regular sales.
6. Examine duplicate sales invoices for consignment sales and other shipments for which titlehas not passed.
7. Trace a sample of accounts from the accounts receivable master file to the aged trial balance.
8. Trace recorded sales transactions to shipping documents to determine whether a documentexists.
9. Examine duplicate sales invoices for initials that indicate internal verification of extensionsand footings.
10. Trace a sample of shipping documents to related sales invoice entries in the sales journal.
11. Compare amounts and dates on the aged trial balance with the accounts receivable masterfile.
12. Trace from the sales journal to the accounts receivable master file to make sure theinformation is the same.