You are auditing accounts receivable (AR) for Koufax Company. The 12/31/2020 AR balances are shown by customer
Question:
You are auditing accounts receivable (AR) for Koufax Company. The 12/31/2020 AR balances are shown by customer number in the associated Excel file. You have selected the following balances to test: 1) all balances over $100,000, 2) nine balances between $25,000 and $99,999 selected randomly, and 3) seven balances less than $25,000 selected randomly.
The balances tested are shown in the “sample” worksheet. There were six balances tested with an error (marked by an “X”) and the correct amount determined by the auditor is shown. Based on the results for the sample answer the following questions.
1. What is the total misstatement for the sample of AR tested?
2. Based on your sample results what is your total misstatement estimate for the AR balance of $4,285,944.74.
3. Based on your sample results what is your estimate of the correct AR balance for Koufax Company at 12/31/2020?
Auditing a risk based approach to conducting a quality audit
ISBN: 978-1133939153
9th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg