After completing a horizontal and vertical analysis of the Balance Sheet and Income Statement. It is noticed that the companies Accounts Receivables is rising faster than both sales and revenue. This brings up concerns of fraud. What type of documentation and information should the auditors request to further evaluate for potential fraud? What might explain this increase in AR?

Answered: After completing a horizontal and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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After completing a horizontal and vertical analysis of the Balance Sheet and Income Statement. It is noticed that the companies Accounts Receivables is rising faster than both sales and revenue. This brings up concerns of fraud. What type of documentation and information should the auditors request to further evaluate for potential fraud? What might explain this increase in AR?

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