r staff auditor, Laurie, performed the audit of A/R for S following, "I chose to confirm the largest A/R of Salm Co urned indicating a balance $25,000 lower than that record usting entry to reduce Salm's A/R by $25,000. Since I ce er work needs to be performed." What would your feedbe Laurie needs to investigate the $25,000 difference and other procedures are needed. Laurie needs to investigate the $25,000 difference and customers since the balance of A/R is overstated.
r staff auditor, Laurie, performed the audit of A/R for S following, "I chose to confirm the largest A/R of Salm Co urned indicating a balance $25,000 lower than that record usting entry to reduce Salm's A/R by $25,000. Since I ce er work needs to be performed." What would your feedbe Laurie needs to investigate the $25,000 difference and other procedures are needed. Laurie needs to investigate the $25,000 difference and customers since the balance of A/R is overstated.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Your staff auditor, Laurie, performed the audit of A/R for Salm Company. Laurie documented
the following, "I chose to confirm the largest A/R of Salm Company. The confirmation was
returned indicating a balance $25,000 lower than that recorded by Salm. I proposed an
adjusting entry to reduce Salm's A/R by $25,000. Since I confirmed Salm's largest A/R, no
other work needs to be performed." What would your feedback be re: Laurie's work?
O Laurie needs to investigate the $25,000 difference and document the reason for it. No
other procedures are needed.
O Laurie needs to investigate the $25,000 difference and send confirmations to other
customers since the balance of A/R is overstated.
Laurie's work is appropriate.
O Laurie needs to investigate the $25,000 difference and send confirmations to other
customers since the balance of A/R is understated.
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