• Confirmation of accounts receivable that have been categorized initially by an auditor as "exceptions" most likely could be due to: O Responses that were mailed rather than faxed to the auditor. O Customers who have credit or zero balances with the

• Confirmation of accounts receivable that have been categorized initially by an auditor as "exceptions" most likely could be due to: O Responses that were mailed rather than faxed to the auditor. O Customers who have credit or zero balances with the

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter9: Auditing The Revenue Cycle.

Section: Chapter Questions

Problem 20RQSC

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Similar questions

When an audit team does not receive a response on a positive accounts receivable confirmation, auditors should do all of the following excepta. Send a second request.b. Do nothing for immaterial balances.c. Examine shipping documents.d. Examine client correspondence files.
During the confirmation of accounts receivable, an auditor receives a confirmation via the client’s fax machine. Which of the following actions should the auditor take?a. Not accept the confirmation and select another customer’s balance to confirm.b. Not accept the confirmation and treat it as an exception.c. Accept the confirmation and file it in the working papers.d. Accept the confirmation but verify the source and content through a telephone call to the respondent.
Explain why it is common for auditors to send confirmationrequests to vendors with “zero balances” on the client’s accounts payable listing butuncommon to follow the same approach in verifying accounts receivable
Which of the following most likely would be included with the client’s confirmation letter, when an auditor decided to confirm customers’ account balances rather than individual invoices.? Select one: a. An auditor-prepared letter requesting the customer to supply missing and incorrect information directly to the auditor. b. A client-prepared letter reminding the customer that a nonresponse will cause a second request to be sent. c. A client-prepared statement of account showing the details of the customer’s account balance. d. An auditor-prepared letter explaining that a nonresponse may cause an inference that the account balance is correct.
Which of the following most likely would be included with the client’s confirmation letter, when an auditor decided to confirm customers’ account balances rather than individual invoices.? Select one: Question 28Answer a. A client-prepared letter reminding the customerthat a nonresponse will cause a second request tobe sent. b. An auditor-prepared letter explaining that a nonresponse may cause an inference that the accountbalance is correct. c. An auditor-prepared letter requesting the customer to supply missing and incorrect informationdirectly to the auditor. d. A client-prepared statement of account showingthe details of the customer’s account balance.
Audit documentation often includes a client-prepared, aged trial balance of accounts receivable as of the balance sheet date. The audit team uses this aging primarily toa. Evaluate internal control over credit sales.b. Test the accuracy of recorded charge sales.c. Estimate credit losses.d. Verify the existence of the recorded receivables.
To gather audit evidence related to accounts receivable, the client should mail the confirmation requests. TRUE OR FALSE? WHY?
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
Which of the following would provide an auditor with the most reliable evidence reguarding the existence of accounts receivable? A. A copy of the invoice sent to the customer. B. Acopy of the customer's sales order held by the client. C. An accounts receivable confirmation received by the auditor from the client's customer. D. An aging schedule showing the composition of the year-end-accounts receivable balance.
An auditor tested the client's internal controls over granting customers credit and establishing customers' credit limits. This test is relevant to the assertion of Valuation for accounts receivable. Question 47 options: True False
What alternative procedures should be applied to accounts that do not return confirmations?
Please answer this question.