## Internal Controls over Trade Receivables
Strong internal controls over debtors ensure completeness, accuracy, and timely collection. An auditor evaluates whether the following controls exist:
### Key Control Points
| Control Area | What to Check |
|---|---|
| Recording | All sales properly recorded in books |
| Settlement | Debtors settled only by cash receipt or authorised write-off |
| Segregation of Duties | Accounting, collection, and reminders handled by different staff |
| Collection | Debtors collected on time |
| Follow-up | Reminders sent; legal action taken when needed |
| Review | Balances regularly reviewed |
| Provisioning | Adequate provision made via ageing schedule of debtors |
### Why Segregation of Duties Matters
If one person handles accounting and collections, fraud is easy to conceal (e.g., teeming and lading). Splitting these roles is a fundamental preventive control.
### Ageing Schedule
An ageing schedule classifies debtors by how long they have been outstanding (e.g., 0–30 days, 31–60 days, >90 days). It helps identify doubtful debts and ensure adequate provisioning.