Question: In the audit of an automobile agency you find that
In the audit of an automobile agency, you find that installment notes received from the purchasers of automobiles are promptly discounted with a bank. Would you consider it necessary to confirm these notes by a communication with the bank? With the makers? Explain.
Answer to relevant QuestionsThe confirmation of accounts receivable is an important auditing procedure. Should the formal request for confirmation be made by the client or by the auditors? Should the return envelope be addressed to the client, to the ...During preliminary conversations with a new staff assistant, you instruct her to send out confirmation requests for both accounts receivable and notes receivable. She asks whether the confirmation requests should go to the ...Do you believe that the normal review of purchase transactions by the auditors should include examination of receiving reports? Explain.The controller of a new client company informs you that most of the inventories are stored in bonded public warehouses. He presents warehouse receipts to account for the inventories. Will careful examination of these ...Multiple Choice QuestionsSelect the best answer for each of the following and explain fully the reason for your selection.a. Which of the following is least likely to be among the auditors’ objectives in the audit of ...
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