Problem 1;Assume the two scenarios;1.You evaluate accounts receivable internal control and conclude the IC risk as being low. Also, you have estimated inherent risk low. The total balance in AR is relatively low.;2.You evaluate accounts receivable internal controls and conclude the IC risk as being at the maximum and inherent risk is moderate. The total balance in AR is very material.;Required: Create two separate audit programs, one for scenario a, and one for scenario b.;Problem 2;The in-charge auditor has calculated, using PPS, that a sample of 117 account receivable invoices should be selected to help determine the accuracy of the AR balance. The invoices were selected and confirmations were sent. The following issues were uncovered. What is your response to each of the issues?;1.Confirmation #34 was not returned.;2.Confirmation #21 was sent back with a comment from the customer saying the amount was paid in January.;3.Confirmation #74 was returned with a comment that the amount is too high due to a returned shipment by the customer.;4.Confirmation #82 was returned to your client.;5.Confirmation #98 was returned with a comment stating that the customer only keeps books as a total balance not individual invoices.
Paper#20455 | Written in 18-Jul-2015Price : $22