You are the in-charge auditor for the Nelson Company engagement for the year ending December 31, 2020. Nelson is a wholesale supplier of building materials and markets its: products to several majorretail chains. After evaluating the company's internal controis, you decide that the prescribedcontroisare not adequate, andassess controlriskat the maximum: tevel. Accordingy, you will rely entirety on substantiveteststoverify the accounts receivable- andrevenue balances. Required: Prepare an audit program that detailsthe specific substantive tests you would apply to Nelson's accounts receivable and revenue for the December 31, 2020 audit engagement.
You are the in-charge auditor for the Nelson Company engagement for the year ending December 31, 2020. Nelson is a wholesale supplier of building materials and markets its: products to several majorretail chains. After evaluating the company's internal controis, you decide that the prescribedcontroisare not adequate, andassess controlriskat the maximum: tevel. Accordingy, you will rely entirety on substantiveteststoverify the accounts receivable- andrevenue balances. Required: Prepare an audit program that detailsthe specific substantive tests you would apply to Nelson's accounts receivable and revenue for the December 31, 2020 audit engagement.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Question 2
You are the in-charge auditor for the Nelson Company engagem ent for the year ending
December 31, 2020. Nelson is a wholesale supplier of building materials and markets its
products to several major retail chains. After evatuating the company'sinternal-controis, you
decide that the prescribedcontrolsare notadequate, andassesscontrol riskut the maximum
level. Accordingly, you will rety entirety on substantivetests toverify the accounts receivable-
аnd reveнue baiances.
Required: Prepare an audit program that details the specific substantivetests you would apply
to Nelson's accounts receivable and revenue for the December 31, 2020 audit engagement.
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