Question: Recommend a substantive test that would be most appropriate for: Account receivables where a company faces a cash flow risk if the receivables become uncollectible

Recommend a substantive test that would be most appropriate for:

  1. Account receivables where a company faces a cash flow risk if the receivables become uncollectible and prior year's audit documentation shows that debtors do not respond to requests to confirm accounts receivable balances.
  2. Inventories where there could be a material misstatement on the value of the inventory and on the inventory costing methods.

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