You have sent confirmations to 40 customers of Berg Shovick Express, a long-time audit client experiencing some financial difficulty. The company sells specialized high-technology goods. You have received confirmations from 32 of the 40 positive confirmations sent. A few minor errors were noted on these accounts, but the projected amount of errors on the confirmations returned is just below tolerable error. The following information is available to you:

Book value of receivables ………………………………….               $7,782,292

Book value of items selected for confirmations ……………   $3,100,110

Book value of items confirmed ……………………………             $1,464,000

Audit value of items confirmed …………………………..              $1,335,000

Summary of items selected but confirmations not returned:

a. Indicate the audit procedures (and be specific as to what those procedures will accomplish) to complete the work on accounts receivable related to the confirmation process. In other words, identify the specific alternative audit procedures that should be performed.
b. Assuming that all items could not be cleared to the auditor's satisfaction, identify the audit procedures that should be implemented to finish auditing the valuation and existence assertions for accountsreceivable.

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Outstuanding Name Management Comments on Account Bakance Yunkel Specialty $432,000 Reular sales, but extended credit terms were given on $200,000 of goods. Yur- kel has responded that it does not respond to confimations. No response to either confirmation request. Manogement indicares the sale was a speciaHerm sale, and the goods are being held for the convenience of this company. The company is located in Albuquerque, New Mexico, and recently hod a fire in its main production plant but expects to resume production earty next month. Th as production begins, but the sale has egally been completed. Hi-Tech Combonitics $300,000 egoods will be shipped as soon Account balance represents sales of spe cialty products mode in late December The president of Berg Shovick has oraly confirmed the receivable becouse Beaver Dam Electronics is 50% owned by him. Beaver Dam Electronics $275,000 Califomia HiFi $200,000 Regular sales, but c has renego- iated its account balance due because of defective merchandise. Manogement has indicated it has issued a credit to the company, but because management had inspected the property, it did not require the return of s on the customer's merchandise. t expeds the company to pay the $200,000. $175,000 Regular sales. This is a new company Specialties Most of the sales I$100,000) were made in December $100,000 Regular sales. Cusomer is negotiating a potential retum of defective items. Willioms is rience indicates that it does notr confirmations Williams Pipeline a large company. Prior Long Tom Towers $54,110 Customer is new this year and is located in Medicine Hat. Saskatchewan