Which of the following would give the assurance that debtors mentioned on the date of balance sheet ...........

Auditing Concept of Auditing

Which of the following would give the assurance that debtors mentioned on the date of balance sheet actually exist?

Sending debtor’s confirmation letters

Reviewing subsequent collection

Verify debtors against sales document

Both (a) and (b)

- Option 1: Sending debtor’s confirmation letters

- It involves reaching out to debtors to confirm their balances.

- Helps ensure that the debts are acknowledged by the debtor, verifying their existence.

- Option 2: Reviewing subsequent collection

- Involves checking the payments received after the balance sheet date.

- Confirms that the debtors were indeed real and capable of making payments.

- Option 3: Verify debtors against sales documents

- Entails cross-referencing invoices and sales records.

- No direct confirmation of existence beyond recorded transactions.

- Option 4: Both (a) and (b)

- Combines confirmation with practical payment evidence.

- Provides strong assurance of debtor existence.

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