Discuss the alternative procedures an auditor can perform to test the existence objective for accounts receivable when customers do not respond to confirmation requests.

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Discuss the alternative procedures an auditor can perform to test the existence objective for accounts receivable when customers do not respond to confirmation requests.

Answer:

For any positive confirmation not returned, the auditor can examine the following to verify the existence of individual sales transactions making up the ending balance in accounts receivable:

• Subsequent cash receipts—evidence of the receipt of cash after the confirmation date includes                       examining remittance advices and entries in the cash receipts records.
• Duplicate sales invoices.
• Shipping documents.
• Correspondence between the customer and the client.

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