Current Attempt in Progress

Edgar, a staff accountant from the audit firm Allenton, wants to utilize audit data analytics $($ADA$)$ to support his audit of accounts receivable at Rushmoore, a company which sells custom portraits of ravens. Edgar knows the need to evaluate a complete listing of Rushmoore's accounts receivable in the analysis. Which of the following would be one step that Edgar could perform to be sure that Edgar is testing the complete listing of all accounts receivable?

Edgar could verify the completeness of the listing by confirming accounts receivable balances with a selection of Rushmoore's customers on the listing. Edgar could make a sample selection of customers and obtain their contact information from Rushmoore. Edgar could then send confirmations to Rushmore's customers to confirm balances to Allenton directly to verify the completeness of the accounts receivable listing.

Edgar could verify the completeness of the listing by reviewing the purchase order$($s$),$ invoice$($s$),$ and shipping documentation for a selection of Rushmore's customers on the listing. Edgar could make a sample selection of customers and obtain the corresponding documents that substantiate the balance the customer owed Rushmoore to verify the completeness of the accounts receivable listing.

Edgar is incorrect in his notion that there is a need to check an accounts receivable listing used for ADA for completeness. While completeness is an assertion that needs to be tested at the account level when doing substantive testing, checking an item that is used for ADA purposes is unnecessary as the auditor is not using this as a test of details. Verifying the completeness of the accounts receivable listing would be time consuming and lead to an inefficient audit.

Edgar could verify the completeness of the listing by footing the listing and matching the total to Rushmoore's general ledger balance. By footing the listing, Edgar would be verifying the mathematical accuracy of the document. By matching the listing to the general ledger, Edgar would be ensuring that the population being tested matches the population which Allenton will opine on$.$