You are auditing Accounts Receivable of HUSKY Corp. as of December 31, 2002. The Accounts Receivable general ledger balance is \($4,263,919.52.\) If you have not already done so, download the data files from the IDEA Software CD. The data files can also be found on the book website http://rittenberg.swcollege.com. Import the files labeled “HUSKY Unpaid Invoices 2002” and “HUSKY Confirm Results 2002.” The supporting subsidiary file,

“Unpaid Invoices 2002,” represents the 12/31/2002 unpaid invoices. “Confirmations 2002” contains the results of the confirmation process and alternative procedures.

Required:

Using IDEA:

a. Print the field statistics and agree the total amount to the general ledger.

b. Plan and select a PPS sample of unpaid invoices to confirm. PPS sampling is labeled

“Monetary Unit” in IDEA. Be sure to use the “Substantive Testing” tab. Use a confidence level of 95% (5% TD risk). The materiality amount for the audit is \($300,000,\) expected aggregate errors from sampling applications and other audit tests are \($10,000\) and \($15,000,\) respectively.

c. Join the “Confirm 2002” file with the sample file and identify any misstatements.

d. Use IDEA to statistically evaluate the sample. (Note: Make the sample file created in part a above the active file. Change the amounts under the column labeled “AUDIT_AMT1” to the correct audit value for the misstatements found in the sample.

Then use the Sample - Monetary Unit evaluation option from the menu to statistically evaluate the sample.

e. Prepare a report interpreting the evaluation and describe the implications for the audit—do the results support the book value or are additional procedures indicated.

If additional procedures are indicated, describe what those procedures should be. Also, calculate and report the percent of dollars and percent of unpaid invoices that were included in the sample.