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69. AUDIT OF ACCOUNTS RECEIVABLE. ASSESSMENT OF THE INTERNAL CONTROL SYSTEM. COMPLIANCE CONTROL
1. Find out from the management of the organization being audited what its policy is regarding customer debt: a stable situation with customer debt; debt buildup as large deferments are offered to capture the market; the desire to reduce debt, since at the time of the company’s development control over its timely repayment was lost; the ratio of receivables and payables is analyzed; is there a need to obtain loans from the bank in the period before the buyers repay the debt, etc.
2. Discuss with representatives of the audited organization:
▪ do they know what percentage of debtors confirmed their debt as of the reporting date and how many debtors were not reconciled as of the reporting date;
▪ how they assess the risks of the presence in the financial statements of debts of insolvent debtors for which a reserve for doubtful debts has not been created, or how confident they are in the correct assessment of the amount of such a reserve.
3. Ask to provide documents establishing the obligation of any official to study the solvency of the debtor and make a decision on creating the amount of the reserve. This is unlikely to be an ordinary accountant who can prepare the accounting data to justify such a decision, but not make it.
4. Ask to provide documents confirming the study of the solvency of two or three debtors, on the basis of which the decision was made to create a reserve for doubtful debts or the lack of need for it.
5. Find out if your accounting software allows you to enter the expected maturity of the debt and create a report on overdue debts. Determine whether such reports are generated by accounting or another department, who analyzes these reports and makes decisions. Ask for such a report to be made for you as of the date of inspection.
6. Form a preliminary opinion about the state of internal control in this area.
Legal Compliance Check in this area may include:
▪ checking compliance with civil law, including the correct determination of the limitation period for receivables;
▪ correct classification of the situation when notifying the bailiff about the impossibility of foreclosure on the debtor’s property;
▪ correctness of taxation of transactions under agreements for the assignment of receivables, formation of tax expenses when creating a reserve for doubtful debts, etc.
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| Random news from the Archive In the heat is not up to love
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To the many troubles that await us in connection with global warming, it seems that one can also add a drop in the birth rate - researchers from the US National Bureau of Economic Research (NBER) found that if over the past 80 years, in some season, the temperature in the United States has risen above 26,7°C, then after 10 months the newborns were smaller than usual. In general, writes Bloomberg.com with reference to the working report of economists from the NBER, the fall in the birth rate each time averaged 0,4% from the previous level. And, most importantly, the subsequent rebound was incomplete: the gain was only 32% of the decline. The authors of the study also note that the negative effect of the heat is partly smoothed out since the 70s of the last century, that is, from the time when air conditioning systems began to become widespread.
If, due to global warming, the global temperature continues to rise, then, given the new data, it is easy to imagine what demographic and, therefore, economic consequences await us all. Ecologists can only note with satisfaction that this is a more weighty argument in favor of some kind of active political action than "a decrease in biodiversity on the planet": the connection between biodiversity and human environmental well-being does exist, but it is very difficult to bring it to the consciousness of the "general public" .
Of course, here it would be interesting to know what specific behavioral and / or physiological mechanism links one to the other. Someone will say that in the heat it is not too drawn to love joys, but the whole point may be in some features of the process of fertilization, the fusion of the sperm with the egg, and the subsequent introduction of the embryo into the uterus.
However, recently an article was published in Behavioral Ecology that speaks just in favor of the first explanation. Zoologists from the University of Exeter decided to find out why some female fruit flies mate with many males, while others suffice with one. On the one hand, there is a genetic predisposition to this or that sexual behavior, on the other hand, can the environment contribute?
It turned out, maybe: when it got colder, most females tended to mate with a large number of males, while when it got warmer, they switched to monogamy. (Some, however, remained poly- or monogamous, regardless of the ambient temperature.) Similar variation in sexual behavior can be found in a number of fish, birds, and reptiles, and may also be partly determined by current environmental conditions.
It would be incorrect to directly compare the two works: in one case, we have experiments under strictly controlled conditions, in the other, there is a statistical correlation, which, by the way, may depend on other factors besides temperature; and let's not forget about the difference between Drosophila and humans. But, nevertheless, we all here definitely have something to think about.
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