Comparing the provision for doubtful debts as a percentage of accounts receivable with previous years can help detect errors in the bad debts expense account.

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By comparing the provision for doubtful debts as a percentage of accounts receivable with previous years, one can identify discrepancies or irregularities in the bad debts expense account, which can help detect errors or fraud. This is because the provision for doubtful debts is an estimate of the amount of bad debts that a company expects to incur. Therefore, if the percentage of provision for doubtful debts is significantly different from previous years, it might indicate either that the company's credit policies have changed or that there are problems with the bad debts expense account.

Comparing the Provision for Doubtful Debts as a Percentage of Accounts