Introduction: The letter sent by an auditor to the suppliers and customers is called a confirmation. It is sent for the verification of the balancepayable and receivable in financial records.
Requirement 1
To ascertain: The reason for confirmations not typically provide reliable evidence about the completeness assertion.
Introduction:The letter sent by an auditor to the suppliers and customers is called a confirmation. It is sent for the verification of the balance payable and receivable in financial records.
Requirement 2
To ascertain: a confirmation exception and its importance to research
Introduction:The letter sent by an auditor to the suppliers and customers is called a confirmation. It is sent for the verification of the balance payable and receivable in financial records.
Requirement 3
To ascertain: The require time that the auditor perform alternative procedures to substantiate the existence of accounts receivable
Introduction:The letter sent by an auditor to the suppliers and customers is called a confirmation. It is sent for the verification of the balance payable and receivable in financial records.
Requirement 4
To ascertain: the conditions that the substantive testing of assets would be appropriate, before the record date
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- if the auditor want to assure that Receivables have not been sold. What assertion he or she want to test : Select one: a. Existence b. Completeness c. Rights and obligations d. Valuation and allocationarrow_forwardWhat is tolerable misstatement? How do auditors use it when deciding whether account balancesare fairly recorded?arrow_forwardWhat audit procedures are most likely to be used to verify accountsreceivable written off as uncollectible? State the purpose of each of these procedures.arrow_forward
- Why are the confirmation of payables is not a required audit procedure as it is with receivables?arrow_forwardNonearrow_forwardConfirmation of accounts receivable is a presumptively mandatory audit procedure. In performing this procedure, auditors use positive confirmation requests or negative confirmation requests or a combination of both. Describe three conditions that should exist for the auditors to use the negative form of request.arrow_forward
- Explain the importance of proper credit approval for sales. Whateffect do adequate controls in the credit function have on the auditor’s evidence accumulation?arrow_forwardThe risk that the auditors will conclude, based on substantive procedures, that a material misstatement does not exist in an account balance when, in fact,arrow_forwardWhy is it necessary to pre-number reports received? In what way might an auditor examine a claim made in the receiving reports?arrow_forward
- Define and give examples of off-balance-sheet information. Why should auditors be concerned with such items?arrow_forwardAuditors try to identify predictable relationships when using analytical procedures. Relationships involving transactions from which of the following accounts would most likely yield the highest level of evidence? a. Accounts receivable. O b. Interest expense. O c. Travel and entertainment expense. O d. Accounts payable.arrow_forwardWhich of the following is correct regarding the use of confirmation letters in an audit of financial statements: a. Blank confirmation letters are usually preferred when the auditor expects an overstatement error in the account balance. b. A reply from a receivable confirmation letter received from the customer through the client is considered an invalid reply, thus another set of confirmation letter should be sent. c. A positive confirmation letter is preferred over a negative confirmation letter when the auditor, based on his past experience with the client, expects minimal to zero errors. d. When an auditor does not receive a reply from a customer for a negative confirmation letter in a considerable period of time, the auditor should send out another set of confirmation letter.arrow_forward
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