Is problem requires the use of ACL software. Use the Metaphor_Trans_All file in ACL Demo, which is a file of outstanding sales invoices (each row rep¬resents an invoice transaction). The suggested command or other source of information needed to solve the problem requirement is included at the end of each question.
a. Determine the total number of invoices (read the bottom of the Metaphor_Trans_All file screen) and total unpaid invoices outstanding (NEWBAL) for comparison with the general ledger (Total Field). What audit procedures would you perform using this information?
b. How many of the invoices included a finance charge (FINCHG), and what was the total amount of the finance charges (Filter, Count Records, and Total Field)? What is the impact of locating finance charges on your assessment of the bad-debt allowance?
c. Determine and print accounts receivable outstanding from each customer and total the amount for comparison with part (a); note: remove the filter from step (b) first (Summarize and Total Field). Which customer number has the largest balance due?
d. What is the largest and smallest account balance outstanding (Quick Sort)? How would you use the information from parts (c) and (d) to assist your decision making with respect to the circularization of accounts receivable? How would you use the information to satisfy presentation and disclosure audit objectives?
e. For the account with the largest balance, prepare and print an aging of the account from the transaction file using the statement date labeled “STMTTDT.” Use the aging date as of4/30/2003 and “NEWBAL” as the subtotal field (Filter and Age). What additional testing could you do with aging (using current and prior year’s information) to assist with the assessment of the allowance for bad debts?
f. To better decide which customers to select for confirmation, you decide to stratify customer balances into two intervals after excluding all balances less than $5,000. How many balances are greater than $5,000? Print the output (Filter and Stratify). Assess the reasonableness of this stratification approach.