Assertions are expressed or implied representations by management that are reflected in the financial statement components. The auditor performs audit procedures to gather evidence to test those assertions.

380 Part 5 Audiring Business Processes LO 10-11, 10-12- 10-26 Assertions are expressed or implied representations by management that are in the financial statement components. The auditor performs audit gather evidence to test those assertions. Required Your client is All's Fair Appliance Company, an appliance wholesaler. Select h most appropriate audit procedure from the following list and enter the number appropriate place on the grid. (An audit procedure may be selected once, more once, or not at all.) than Audit Procedure: 1. Review of bank confirmations and loan agreements. 2. Review of drafts of the financial statements. Total sen Accounts Total sele Total acco 3. Select a sample of shipping documents, match them with related sales invoices and determine that they have been included in the sales journal and accouns receivable subsidiary ledger. Negative 4. Select a sample of shipping documents for a few days before and after year-en,d. 5. Confirmation of accounts receivable. Total co Positive Total Differe Negati 6. Review of aging of accounts receivable with the credit manager. Assertion Audit Procedure a. Ensure that the entity has legal title to accounts receivable rights and obligations). amounts owed to the client (completeness). rect period (cutoff). properly stated (valuation and all (existence). Total C b. Determine that rec c, verify that all accounts receivable are recorded in the cor- d. Ensure that the allowance for uncollectible accounts is e. Confirm that recorded accounts receivable are valid d accounts receivable include all