1. True OR False
2. When the auditors compare a sample of shipping documents to related sales invoices, they are trying to locate Items that have been billed but not shipped.

2. All allowances to customers for returned or defective merchandise should be supported by serially numbered credit memoranda signed by an officer or responsible employee having no duties relating to handling cash or the maintenance of customers’ ledgers.

3. The auditors should perform alternative auditing procedures on all negative confirmation requests that are not returned.

4. When it is “impossible” to confirm accounts receivable, the auditors can never issue an unqualified opinion on the client’s financial statements.

5. Inspection of notes receivable on hand should be performed concurrently with the count of cash and securities to prevent the concealment of a shortage by substitution of cash for misappropriated negotiable instruments, or vice versa.

Answer rating: 100% (QA)

1 True it helps to check that billed items were shipped and to know what w... View the full answer