Confirmation of Accounts Receivable

To gather audit evidence related to accounts receivable, the client should mail the confirmation requests.  TRUE OR FALSE? WHY?

of stion For a sample of sales transactions selected from the sales journal, verify that the amount of the transaction has been recorded in the correct customer account in the accounts receivable subledger. Choose the Audit Objective: Choose the specific audit objective →

Which of the following procedures would provide the most reliable audit evidence?a. Inquiries of the client’s internal audit staff.b. Inspection of prenumbered client purchase orders filed in the vouchers payable department.c. Inspection of vendor sales invoices received from client personnel.d. Inspection of bank statements obtained directly from the client’s financial institution.

Choose the one correct answer. Sending accounts receivable confirmation letters to the client's customers is consistent with the auditor's objective of validating client's receivable assertion on: A. Completeness and rightsb.Completeness and valuationc. E xistence and rightsd. Existence and valuatione. None of the above

Management Assertions. Your audit manager has asked you to explain the PCAOB assertions by using an account on the balance sheet at your audit client. For the accounts receivable account, please define each of the PCAOB assertions, using the accounts receivableaccount as a way to illustrate each assertion. You are encouraged to reference Exhibit 1.5 tohelp you answer this question

Which type of evidence is considered more reliable and relevant by the auditor? accounts receivable confirmation O minutes from management meetings O internally generated evidence O copy of cash receipt

The following are specific balance-related audit objectives applied to the audit of accounts receivable (a. through i.) and management assertions about account balances (1 through 6). The list referred to in the specific balance-related audit objectives is the list of the accounts receivable from each customer at the balance sheet date. i (Click the icon to view the audit objectives.) i (Click the icon to view the management assertions.) Requirement For each specific balance-related audit objective, identify the appropriate management assertion. (Hint: See table.) Specific balance-related audit objective There are no unrecorded receivables. b. Uncollectible accounts have been provided for. C. Receivables that have become uncollectible have been written off. d. All accounts on the list are expected to be collected within 1 year. The total of the amounts on the accounts receivable listing agrees with the general ledger balance for accounts receivable. a. e. Management assertion

Financial audit Q&A What is the file type of the customer confirmation that is related to the outstanding balance the client has?

Match each example audit procedure with its correct general audit objective related to accounts receivable. Select a sample of sales invoices in the subsequent period, and examine the related shipping documents for date of shipment to ascertain whether some of those shipments at the end of the period were inadvertently not recorded Provide a list of related parties to all members of the audit team to assist in identification of the transacations Existence of assets Rights to assets Review confirmations of liabilities to determine if receivables have been sold Completeness of assets Compare the amount of credits given to customers in the subsequent period to the amount estimated by management Cutoff of transactions Confirm a sample of receivables by direct communication with the debtors Valuation of assets Vouch sales and cash receipt transactions occurring near period end Financial statement presentation and disclosure of

What are the risks associated with auditing accounts payable? Can you explain the process of auditing accounts payable using confirmations.

asap F Identify the primary audit objectives that auditors hope to accomplish by confirming a client's year-end accounts receivable. Explain the difference between "positive" and "negative" confirmation requests and discuss the quality of audit evidence yielded by each.

An auditor is likely to perform each of the below procedures to obtain evidence regarding the potential understatement of accounts payable at year-end (i.e., the Completeness assertion) except…   Question options:   Inspect purchase orders and receiving reports for accounts payable recorded at year-end.   Inspect the open invoice file for invoices to be paid after year-end.   All options describe procedures that can be used to identify a potential understatement of accounts payable.   Analyze cash disbursements made during the first few weeks of the subsequent year and inspect supporting documentation for each disbursement.

Which of the following audit procedures is a dual-purpose test, which tests the effectiveness of internal controls as well as any material misstatements in the financial statements?   A. The auditor accounts for the sequence of sales invoices.   B. The auditor selects a sample of transactions in the sales journal and traces them to the relevant shipping documents.   C. The auditor adds the transactions in the purchase journal and agrees to the total amount recorded in the general ledger.   D. A test over the bank reconciliation.   E. The auditor obtains a sample of timesheets for casual employees and checks for evidence of approval.

Audit evidence can come in different forms with different degrees of reliability. Which of the following types of evidence is the least reliable?a. Invoices from suppliersb. Bank statements obtained from clientsc. The calculations made by the auditord. Sales invoice unnumbered

The typical procedures performed to verify that the client has not omitted any amounts from the payables balance include:  Select one: a. performing confirmations of payables accounts b. performing analytical review procedures c. vouching recorded payables to supporting documentation d. subsequent payments testing

ut of estion Send letters to a sample of accounts receivable customers to verify whether they have an outstanding balance at December 31, 2016. Choose the Audit Objective: Choose the specific audit objective