Final answer:
To ensure the completeness of receivables, one can perform a cut-off analysis, confirm receivables, and review subsequent cash receipts. These substantive procedures verify that all sales and services delivered within the accounting period are recorded adequately and that all existing receivables are included in the financial statements.
Step-by-step explanation:
To ensure the completeness of recorded receivables, one substantive procedure is to perform a cut-off analysis. This involves analyzing the transactions recorded a few days before and after the year-end, ensuring that all sales and receivables that belong in the period are recorded in it. It is critical to ensure that all receivables that arise from sales or services delivered are included in the financial statements of the correct accounting period.
Another method is conducting confirmation of receivables. By directly reaching out to the company's clients and inquiring about their statement balances, one can verify the existence and completeness of recorded receivables.
Lastly, reviewing subsequent cash receipts can provide evidence that receivables existed at year-end and that they were complete. By checking payments received after the year-end that apply to the year-end receivables, an auditor can ascertain if receivables were overlooked or recorded in a subsequent period inappropriately.