AR Due Diligence
AR Due Diligence
Accounts Receivable (AR) Due Diligence is a focused audit process that evaluates the accuracy, validity, and recoverability of receivables recorded in an organization’s books. It is especially critical for lenders, investors, and acquirers to assess the quality of receivables prior to extending financing or proceeding with a transaction.
By validating receivable balances, analyzing ageing profiles, and identifying doubtful, overdue, or disputed accounts, AR due diligence offers clarity on the organization’s actual liquidity position and highlights potential risks that could impact cash flows.
About This Service
Our AR due diligence services are structured to deliver an independent and comprehensive assessment of receivable portfolios. We verify invoices, obtain customer balance confirmations, and evaluate the recoverability of outstanding amounts using both direct and indirect audit procedures.
We conduct detailed ageing analysis to identify overdue balances, customer concentration risks, and doubtful receivables that may require appropriate provisioning. This enables stakeholders to gain a clear and realistic understanding of receivable quality.
We also review the effectiveness of credit control policies, collection processes, and dispute resolution mechanisms, offering insights into management’s ability to maintain liquidity and manage credit risk efficiently.
Through AR due diligence reports, we support banks, NBFCs, investors, and acquirers in making informed financing and investment decisions, while also assisting organizations in strengthening working capital management.
Key Features / Scope of Work
Independent validation of receivables and accuracy of invoices
Customer balance confirmations and reconciliation procedures
Ageing analysis of receivables with emphasis on overdue balances
Identification of doubtful, disputed, or uncollectible receivables
Review of credit control policies and collection efficiency
Assessment of customer concentration risk within receivable portfolios
Recommendations on provisioning requirements and risk mitigation
Assurance to lenders, investors, and acquirers on the quality of receivables
- Specialized & Bank-Related Audits
- Concurrent Audits (Banks, NBFCs, Financial Institutions, Payment Banks)
- Retail Assets & Retail Liabilities Audit
- Treasury, Forex & Depositories Audits
- KYC (includes Video KYC)/ AML Audits
- Third Party Vendor Audits
- AR Due diligence
- Stock Audits (for Working Capital Financing)
- Revenue & Expense Audits
- Branch Statutory Audit (BSA) & Central Statutory Audit (CSA)
- Audit under RBI/NABARD/CAG Mandates
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