This is one of the many ratios used by auditors in ratio analysis. As with other ratios, the auditor compares the actual value of the ratio at a point of time with the expected value of the ratio.
Any unexpected change is investigated.
To avoid the actual value of the ratio biasing the auditor's estimation of the expected value, auditors estimate the expected value before calculating the actual value. Days sales in receivables provides an estimate of the number of days, on average, that it takes for customers to pay their account. By itself, however, the ratio does not convey alot of meaning. In particular, the client's terms of trade with its customers must be considered. Comparison of the ratio also provides more meaningful information.