6. When auditors audit A/R, they can send either positive confirmations or negative confirmations. Please tell me the differences between those two kinds of confirmations.

7. When auditors send two rounds of A/R confirmations and still receive no responses, audit standards allow them to use alternative audit procedures. Please tell me how to perform alternative audit procedures. Please list at least 4 useful documents.

8. Auditors often use analytical procedures when they perform substantive tests of A/R accounts, please list at least 3 ratios that are useful to auditors.

9. How to review the year-end cutoff of sales transactions? Shall an auditor rely on clients invoices and dates on invoice document? Why or why not?

10. Please tell me the two revenue recognition criteria under the pre-2018 FASB revenue recognition standard (aka. The old FASB revenue recognition standard) and briefly explain them.

11. Under the new FASB revenue standard (aka, post-2018 revenue standard, effective after December 15, 2017, for publicly traded firms in the U.S.), when revenue could be recognized?

12. Please identify and describe important internal controls over the credit sale (NOT cash sale) process.

13. What are the key supporting documents involved in a credit sale transaction? Which department issue which document? Please list at least 4 documents.

14. When you audit manufacturing firms or retailers, why inventory is often the most vulnerable (also dangerous) account that could be subject to high risk of material misstatement?

15. Do you have to worry about inventory account when you audit a local community bank? How about an insurance firm or a hedge fund? Why?

16. How does the presence of perpetual records affect the audit? (Tip from the professor: Unless there are well-controlled perpetual records, auditing standards require the auditor to observe the physical count of inventory at year-end. If the client has well-kept perpetual inventory records, the observation can correspond to the client's periodic counts if taken during its fiscal year).

17. For manufacturing firms, their inventories should be valued based on the lower of cost or market price. Please explain how to decide the market price? If the cost is higher than the market price, what kind of accounting adjustment a firm should make?

18. Please identify and describe important internal controls over the credit purchase process.

19. What are the key supporting documents involved in a credit purchase transaction at a manufacturing firm? Which department issue which document? Who has the authority to sign the payment checks and mail them to suppliers?

20. Inventory consists of three sub-accounts. Please name all of them for a manufacturing firm.

21. What is material requisition form? What is its function? What is time ticket? Why it is useful?