Final answer:
To test the existence assertion during an audit, an auditor can confirm accounts receivable with customers, review sales invoices and shipping documents, inspect bank statements for deposits, and analyze the aging of accounts receivable.
Step-by-step explanation:
Appropriate Procedures to Test Existence Assertion of Accounts Receivable
To test the existence assertion during an audit of accounts receivable, auditors can perform several procedures. First, confirming accounts receivable with customers is a direct method of verifying that the amounts recorded in the accounts actually exist and are acknowledged by the customers themselves. Secondly, reviewing sales invoices and shipping documents provides evidence that the sales transactions occurred and goods were shipped, supporting the balances in the accounts receivable. Lastly, analyzing the aging of accounts receivable can indicate the collectibility of receivables and highlight any discrepancies in amounts that customers may dispute.
Inspecting bank statements for deposits also contributes to the assessment of the existence of receivables by demonstrating that amounts due have been received and are not fictitious sales. Each of these procedures is useful in its own way to provide assurance to auditors about the existence of the stated accounts receivable.