Why is an accounts Receivable aging report needed for an audit?
An audit can be conducted by various parties to ensure the accuracy of the information being reported by a company. Financial audits often inspect reports such as the balance sheet, income statement and accounts receivable aging.SignificanceSome private companies hire accounting firms to perform audits. Publicly traded companies are required by law to have audits. Audits can give the perception that company bookkeeping is accurate. This is important for business image, especially when considering shareholders. Audits can also be conducted by banks. This may be required for asset-based lending. Audits are also conducted by state and federal organizations for tax purposes.Accounts Receivable AgingThe accounts receivable aging is a report that shows all of the company’s unpaid credit sales. The age of each sale places it in an aging bucket that may range from 0-30, 31-60, 61-90 and so forth. The delinquency or past-due nature of an accounts receivable is governed by the credit terms exten
