Following procedures will be followed:
Ensure that recovery pertains to bad debts properly written off in earlier years and the decision for writing off of bad debts was recorded properly.
Ascertain total bad debts and see whether all recovery of bad debts is recorded properly in the books of account and deposited into bank.
Check all notifications from court or bankruptcy trustee and all correspondence from debtors and collecting agencies.
Check credit manger‟s files for amount recovered and confirm acknowledgment receipts issued to trustees/ debtors.
If amount recovered is material, ensure that proper disclosure has been made in the financial statements.