Acca aa s21 Notes

September 2021 to June 2022 exams
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Scrutiny of credit notes issued after year end is very important. It is possible for a company to 
debit a receivable account and credit sales just before year end, and then very early in a new 
year to reverse that transaction by issuing a credit note. This gives a mechanism for the 
company to boost its income and profit for the year which is then quietly reversed out.
The tests above fall into two types of substantive procedure:
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Analytical procedures:
collection period, compare receivables to last year etc.
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Tests of detail:
where the auditor traces and inspects the details which 
provide evidence that an amount is free from material 
misstatement 
WHEN YOU FINISHED THIS CHAPTER YOU SHOULD ATTEMPT THE 
ONLINE AA MCQ TEST
 
September 2021 to June 2022 exams
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September 2021 to June 2022 exams
Watch our free ACCA AA lectures
90

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Chapter 18