Audit Risk 7
The manager in Esk Co's credit control department has been off work since December 20X4 due to ill health and has been replaced by an inexperienced temporary manager.
As a result, Esk Co has not been monitoring the ageing of its receivables and only follows up on outstanding invoices when the system alerts credit control that a customer invoice has been outstanding for 90 days or more.
The standard credit terms are 30 days
The receivables collection period has increased from 65 days in 20X4 to 85 days in 20X5
Identify and Explain the Audit Risk