The aged accounts receivable report is utilized by the auditor to
A)encourage the client to collect on receivables that are long past due.
B)select the type of confirmations that will be sent to banks.
C)assess the adequacy of the allowance for doubtful accounts.
D)identify debits in the receivables balance that should be reclassified to payables.

Question

Quizplus · Accepted Answer

The aged accounts receivable report provides information on receivables that are outstanding for an extended period, allowing the auditor to assess the adequacy of the allowance for doubtful accounts. The report shows the amount of outstanding receivables by age, which the auditor can use to determine whether the client has appropriately accounted for the risk of non-payment. Therefore, choice C is the best answer. A, B, and D are not significant uses of the aged accounts receivable report for the auditor.

The Aged Accounts Receivable Report Is Utilized by the Auditor