The auditors have determined that each of the following objectives will be a part of the audit of SSC Corporation. While several procedures will ordinarily address an audit objective, select the procedure most directly related to the audit objective. Each procedure may be used once, more than once, or not at all. 1. All receivables that should be recorded are recorded as of year-end. 2. Recorded receivables are at appropriate net realizable values. 3. Recorded receivables exist. 4. The client has rights to recorded year-end receivables. 5. The presentation and disclosure of receivables are adequate. Trace a sample of sales invoiced from late in December to the sales journal and to postings in accounts receivable and sales amounts. Review the aged trial balance for significant past due accounts. Review board of director minutes and underlying contracts and sales terms with customers. Vouch year-end accounts receivable balanced to supporting documents, such as shipping documents and subsequent cash receipts. Obtain an understanding of the nature of the receivables and how they are collected. Inquire about bank line of credit and loan agreements and what, if any, relationship these agreements have with respect to receivables.

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

Chapter11: Auditing Inventory, Goods And Services, And Accounts Payable: The Acquisition And Payment Cycle

Section: Chapter Questions

Problem 23RQSC

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The auditors have determined that each of the following objectives will be a part of the audit of SSC Corporation. While several procedures will ordinarily address an audit objective, select the procedure most directly related to the audit objective. Each procedure may be used once, more than once, or not at all.

1.	All receivables that should be recorded are recorded as of year-end.
2.	Recorded receivables are at appropriate net realizable values.
3.	Recorded receivables exist.
4.	The client has rights to recorded year-end receivables.
5.	The presentation and disclosure of receivables are adequate.

	Trace a sample of sales invoiced from late in December to the sales journal and to postings in accounts receivable and sales amounts.
	Review the aged trial balance for significant past due accounts.
	Review board of director minutes and underlying contracts and sales terms with customers.
	Vouch year-end accounts receivable balanced to supporting documents, such as shipping documents and subsequent cash receipts.
	Obtain an understanding of the nature of the receivables and how they are collected. Inquire about bank line of credit and loan agreements and what, if any, relationship these agreements have with respect to receivables.

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