Question 3 [CLO 5] (15 Marks) Read the following two cases and answer the questions that follow: Case A: / Cynthia Roberts, CPA, expresses the following viewpoint: "I do not believe in perfor of controls and substantive tests of transactions for the sales and collection cycle. As an alternative, I send a lot of negative confirmations on every audit at an interim date. If I find a lot of misstatements, I analyse them to determine their cause. If internal controls are inadequate, I send positive confirmations at year-end to evaluate the amount of misstatements. If the negative confirmations result in minimal misstatements, which are often the case, I have found that the internal controls are effective without bothering to perform tests of controls and substantive tests of transactions, and the confirmation requirement has been satisfied at the same time. In my opinion, the best test of internal controls is to go directly to third parties." Required: Do you agree with her point of view? Why or why not? Justify your response with logical arguments. (5 Marks) 2 Case B: Dodge, CPA, is auditing the financial statements of a manufacturing company with a significant amount of trade accounts receivable. Dodge is satisfied that the accounts are correctly summarized and classified and that allocations, reclassifications, and valuations are made in accordance with GAAP. Dodge is planning to use accounts receivable confirmation requests to obtain sufficient appropriate evidence as to trade accounts receivable.