AutoTire Inc. is your Client: Monetary Unit Sampling

You have been charged with reviewing a staff auditor's MUS and related procedures on the audit of SEC public registrant Auto Tire Incorporated of 12/31/2020. The staff auditor, Ima W. Rong, claims to have followed monetary unit sampling and performed accompanying audit procedures plan as documented below. The staff auditor's work appears - below - in a numbered list to facilitate your review and our evaluation of your review.

Following the staff auditor's work (attached), you will find a table that includes a new row for numbered item completed by the staff auditor. For each rowumbered item, you must indicate either:

"okay, leave the notes as is; OR

Both describe and implement, to the extent practicable, any corrections needed.

AutoSive Co) 4 9 0 Document1 - Saved to this PC - P Search Eric Macis EM X File Home Insert Design Layout References Mailings Review View Help Foxit PDF Share Comments That is, based on your review notes, we will be able to understand both where you think the staff auditor performed poorly and what you believe would correct the staff auditor's shortcomings (so far as you can tell from the work paper documentation provided). When providing corrections, you should show and explain your work. Question: To test A/R monetary units, I used U.S. mail to send 13 separate customers a positive form confirmation with a self-addressed, stamped return envelope. For 11 of these 13 customers, I received an e-mail back indicating all information was correct. I therefore concluded that these 11 customers' A/R exist and are properly valued. The two remaining confirmations were returned by U. S. mail in the provided envelope and indicated the following two misstatements as summarized in the table below. Customer Book Value Audit Value Misstatement Commentary Bank's Tire $100,000 SO $100,000 Customer reports that they paid the account on 12/30. As such, this should no longer be listed as a A/R on AutoTire's books. Fleming's Tire $100,000 $150,000 ($50,000) Fleming placed an order for $50,000 more of tire inventory on 12/31. Net $50,000 Misstatement Overstatement Is this okay or if not describe and implement, to the extent practicable, any corrections needed Page 1 of 3 604 words CQ - - + 1 S X N POP A 40 6:53 PM Type here to search Desktop 12/16/2020