Accounts receivable

Introduction   Martinrea International Inc. (TSX:MRE) is a Canadian manufacturing company servicing customers around the world, primarily in the automotive sector. Founded in 2001, Martinrea has grown rapidly through both acquisition and organic growth, and currently employs over 14,000 people in 44 plants across North America, South America, Europe, and Asia. The Vaughan, Ontario-based company has four sectors in its corporate structure, which include aluminum, fluids, metallics and modules. Martinrea’s

Annual saving from reduction in investment in accounts receivable $394,520.55 Annual saving from bad debt expense $200,000 Saving due to cas discount $54,521 Yes, offering the cash discount would be justified financially because it could reduce the average collection period from 75 days to 45 days and average investment could decrease $2,630,136.99 resulting in a saving from reduction in investment in account receivable of 394,520.55. Furthermore, the reduction

control totals generated by the accounts receivable computer program. Control embezzlement of

age of receivables for a single company over multiple periods suggests a company is becoming more efficient or effective at managing its receivables (Bujaki & Durocher, 2012; Gibson, 2011). Accounts receivable turnover is the second method by which a company’s trade receivables’ liquidity can be evaluated (Gibson, 2011). Žager et al. (2012) noted turnover ratios should be as high as possible as this indicates a firm’s ability to convert its assets more often. 3M’s accounts receivable turnover

documentation showing the accounts receivable subsidiary total reconciled to the accounts receivable control account. Alternatively, total the subsidiary and compare the amount to the control account. 13. Obtain client’s documentation showing reconciliation of intercompany receivables and payables for sales and purchases. Alternatively, confirm balances with subsidiaries or other auditors. 14. Select a sample of credit files and trace to customers’ accounts receivable, noting extent of update

Audit plan – Accounts Receivable and Notes Receivable Audit Procedures Audit Objectives W/P Ref. Initials Comments Accounts Receivable 1. Obtain an aged trial balance of individual customer accounts. Recalculate the total and trace to the general ledger control account. 2. Review the aging for large and unusual items. 3. Send confirmations to all accounts over $X. Select a random sample of all remaining accounts for confirmation. a.i.1.a.i.1.a. Investigate exceptions reported by

are what increased the total construction costs, as the increased costs are to cover kickbacks to those involved in the scheme. Misstating Financial Statements- Overstating Revenue through accounts receivable Perpetrators and Pressure: There are some obvious inconsistences between what the accounts receivable being reported was and what our audit team calculated. The perpetrators of this fraud was a combination between Phil Ackers (President) and Julie Roper (Assistant to the President). During our

Introduction Ford Motor Company is a pioneer in the automotive industry; based in Dearborn, Michigan it assembles and distributes automobiles throughout six continents. The company’s automotive brands include Ford and Lincoln. With over 187,000 employees and 62 plants worldwide, the company additionally provides financial services through Ford Motor Credit Company. By 31 December 2014, Ford sold approximately 6.3 million vehicles worldwide, distributing from 11,980 dealerships. With no one, dominant

Principle Source and uses of Cash 7 Amount of Money Collected from the Customers in Last 5 Years 8 Return on Assets (ROA) 9 Total Asset Turnover 10 Return on Equity (ROE) 11 Number of Days Inventory Held on Average 12 Number of Days to Collect Account Receivable on Average 13 Current ratio 14 Quick Ratio

Sales and Collection Cycle The objective in the audit of the sales and collection cycle is to evaluate whether the account balance affected by the cycle are fairly presented in accordance with accounting standards. There are five classes of transactions in the sales and collection cycle. • Sales • Cash Receipts • Sales returns and allowances • Write-off of uncollectible accounts • Estimate of bad debt expense (Arens, 2012, p.442) The Key control activities are proper segregation of duties