Question: Suppose that you selected a sample of customers accounts receivable
Suppose that you selected a sample of customers’ accounts receivable and wanted to find supporting evidence for the entries in the accounts. Where would you go to vouch the debit entries? What would you expect to find? Where would you go to vouch the credit entries? What would you expect to find?
Answer to relevant QuestionsWhat account balances are included in a revenue and collection cycle?Which audit procedures are usually the most useful for auditing the existence assertion?In the case of Bill Often, Bill Early, what information might have been obtained from inquiries? From tests of controls? From observations? From confirmations?Auditors sometimes use comparisons of ratios as audit evidence. An unexplained decrease in the ratio of gross profit to sales may suggest which of the following possibilities? a. Unrecorded purchases. b. Unrecorded sales. c. ...Confirmation of individual accounts receivable balances directly with debtors will, of itself, normally provide the strongest evidence concerning the a. Collectability of the balances confirmed. b. Ownership of the balances ...
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