Week – 8

(a) Key account (b) Key assertion at (c) Explanation: (d) Substantive test
balance at risk: risk: of detail/ Audit
Process
Debtors and Sales are Debtors- Valuation Sales- i. Obtain independent
two accounts which and presentation & confirmation from
are at material disclosure Considering that debtors
misstatement risk. customer is facing
increasing difficulty ii. verify subsequent
in financial side and collection of invoices
hence, realization before approval of
remains a challenge. audit report
In such
circumstances, iii. Request
valuation & management to
completeness of sales access financial
gets affected because statement of the
sales cannot be customer
recorded as per
GAAP if realization iv. Discuss with
is under question. management on
course of action
Debtors-

Considering that
customer is facing
increasing difficulty
in financial side and
hence, realization
remains a challenge.
In such
circumstances,
provision for bad
debt allowances
leading to
presentation &
disclosure and
valuation assertion
remains under
question.