Testing Prepayments

Question 1

Completeness (compare prepayments reasonable)

Answer 1

Compare the level of prepayments to previous uear to ensure figure is reasonable and complete

Question 2

Review (SOFP prepayments)

Answer 2

Review detailed SOFP to ensure all likely prepayments have been included

Question 3

Accuracy, valuation and allocations (prepayments recalculate prepaid)

Answer 3

Sample of prepayments from prepayments’ listing, recalculate the amount prepaid to ensure it has been accurately calculated

Question 4

Existence (verify reference invoices)

Answer 4

Verify by reference to invoices, cash book and correspondence