What are some justifications for not using confirmations of accounts receivable on a particular audit?
Answer to relevant QuestionsWhat special care should be taken with regard to examining the sources of accounts receivable confirmation responses?Revenues are normally considered to have been earned when \a. All possibility of return has expired. b. The company has substantially accomplished what it must to be entitled to the benefits. c. The cash is collected. d. ...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. ...Which of the following might be detected by auditors’ cutoff review and examination of sales journal entries for several days prior to the balance sheet date? a. Lapping year- end accounts receivable. b. Inflating sales ...When an audit team does not receive a response on a positive accounts receivable confirmation, auditors should do all of the following except a. Send a second request. b. Do nothing for immaterial balances. c. Examine ...
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