Early February: the auditor started the process by making sure that amounts presented in the FS correspond to the balances in General Ledger as of December 31 and, as a second step, that these balances correspond to totals of journals, sub-ledgers, lists, etc. that give the details of the accounts. There was no error and, so, the auditor can use these documents for testing.

scenario:- Select a sample of accounts receivable balances from the accounts receivable sub-ledger and mail a letter to each selected customer asking them to confirm the balance.

Required:-

• identify the main account or class of transactions that is involved[1]
• describe the main potential error that is targeted by this procedure
• identify the main consequence that such error would have on the FS
• identify the most relevant audit assertion that is involved (if you identify more than one assertion, I will consider only the first as the most relevant)

With double-entry accounting, you can always identify a second account. Audit procedures aim at a precise account or class of transactions though.