The ABC Appliance Company, a manufacturer of small electrical appliances, deals exclusively with 20 distributors situated throughout the country. At December 31 (the balance sheet date), receivables from these distributors aggregated $875,000. Total current assets were $1.3 million.
With respect to receivables, the auditors followed the procedures outlined below in the course of the annual audit of financial statements:
1. Reviewed the system of internal control and found it to be exceptionally good.
2. Reconciled the subsidiary and control accounts at year-end.
3. Aged accounts—none were overdue.
4. Examined detail sales and collection transactions for February, July, and November.
5. Received positive confirmations of year-end balances.

Criticize the completeness or incompleteness of the above program, giving reasons for your recommendations concerning the addition or omission of any procedures.

  • CreatedJanuary 09, 2015
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