(c)  Trade receivables
   Matters:
   –  Materiality
  –  Trend in receivables collection periods is inconsistent
  –  New billing system could explain the change in trends
  –  Management using more judgement in determining allowance, the increase is significant and not adequately explained by management

Evidence:
  –  Notes of a discussion with management on the results of the analytical procedures
  –  A copy of the aged receivables analysis, reviewed for significant changes in year
  –  Documentation on the new billing system, to confirm our understanding of the system and relevant controls
  –  Further analytical procedures performed on the allowance for credit losses
  –  Notes of a discussion with management which include the assumptions used by management in determining the amount of the allowance, and the method by which it was calculated
   Maximum marks  7
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