Question: The misstatements that you found during your audit of the

The misstatements that you found during your audit of the year-end accounts receivable balance are listed after the following lettered items.
a. For each item, indicate the audit procedures that could evaluate the potential misstatement in the financial statements and the management assertion addressed by the audit procedure.
b. How would you determine whether the misstatements were caused by errors on the part of the audit client or fraud? Does it matter?
(1) Sales totaling $1,254,721 were shipped on January 3, 2012, and recorded on December 31, 2011.
(2) Balances in individual customer accounts do not agree with the support-ing documents (invoices, shipping documents, cash receipts).
(3) Some sales transactions were not recorded.
(4) A customer account in the > 0–30 days category in the aged trial balance is actually more than 120 days old.
(5) Actual accounts receivable written off in 2011 were higher than the
December 31, 2010, allowance for uncollectible accounts balance.

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