AR Audit Prep Checklist
Good audit preparation makes the accounts-receivable part of an audit fast and painless. This checklist assembles the reconciliations, evidence and support an auditor will ask for, before they ask.
What this checklist covers
- Assemble the AR reconciliations an auditor expects
- Prepare the aged analysis and provision support
- Gather evidence for cut-off and confirmations
- Document write-offs, credits and adjustments
- Organise everything so requests are answered quickly
7 min
Before you start
An auditor tests assertions, so your prep should anticipate them. Make sure the period is closed and your supporting files are complete before the fieldwork starts.
- Confirm the period is closed and locked and the AR reconciliation is signed.
- Gather the aged trial balance tied to the GL at the audit date.
- Collect provision workings, write-off approvals and credit-note support.
- Identify the accounts likely to be selected for confirmation or testing.
Step 1 — Reconciliations and ledger support
- Provide the signed AR reconciliation showing sub-ledger to GL control account agreement.
- Include the aged trial balance at the audit date, agreeing to the reconciliation.
- Show the make-up of any reconciling items with evidence.
- Have intercompany agreements ready if related entities are in scope.
Step 2 — Valuation and cut-off evidence
- Provision support: the method, the ageing basis and the specific-account rationale.
- Write-offs and credits: approvals, reasons and the supporting paperwork.
- Cut-off: evidence that invoices and receipts fell in the correct period.
- Subsequent receipts: proof of post-period cash that supports recoverability.
Step 3 — Confirmations and presentation
- Prepare the customer list and balances for any confirmation sample.
- Be ready to provide invoices, contracts and remittances for selected items quickly.
- Index everything so each likely request maps to a ready file.
- Nominate a single contact to manage auditor queries and turnaround.
Subsequent receipts after period end are strong evidence that a debt is recoverable, so keep applying cash promptly through the audit. A free debt appraisal can also support your view on which aged balances remain collectable.
Common mistakes
- An unsigned reconciliation. Auditors expect a reviewed, signed AR reconciliation at the audit date.
- No provision rationale. A provision figure with no documented basis attracts questions.
- Missing approvals. Write-offs and credits without sign-off are a control finding.
- Disorganised support. Hunting for each invoice during fieldwork drags the audit out.
Key takeaways
- Lead with a signed reconciliation that ties the sub-ledger to the GL
- Document the provision method, write-offs and credits with approvals
- Have cut-off and subsequent-receipt evidence ready to prove recoverability
- Index support so each likely auditor request maps to a ready file
Frequently asked questions
What AR evidence do auditors most commonly ask for?
A signed sub-ledger-to-GL reconciliation, the aged trial balance at the audit date, the bad-debt provision workings, support for write-offs and credit notes, and evidence of cut-off. They often also confirm a sample of customer balances directly and review subsequent receipts as evidence of recoverability.
Why do auditors care about subsequent receipts?
Because cash received after the period end is strong, objective evidence that a receivable was genuinely owed and collectable at the reporting date. Keeping cash application current during fieldwork lets you show that many balances have since been paid, which supports the valuation of AR.
How can I make the AR audit faster?
Close and lock the period, sign the reconciliation, document the provision and adjustments, and index your support so each request maps to a ready file. Nominating one contact to handle queries also avoids duplication and keeps the auditor moving.
Work the checklist, then get paid
Use the free Invoice Generator, then let Merion recover anything that goes unpaid — commission-only.