You are the staff auditor assigned to the first-year audit of Buff Brewing Co. for the year ended 12/31/X0. You have been asked to consider the accounts receivable confirmation reply results indicated below. Assume that all amounts involved are considered material. For each confirmation reply, select the best action to be taken by the auditor. Actions in the list may be used once, more than once, or not at all.

1)	You received no reply to a negative confirmation request to Joe Tacos Co.
2)	“Our records show that we sent them a check for the amount due on 12/29/X0.”
3)	“We use a voucher system by individual invoice. We cannot verify the balance, but Buff Brewing is one of our regular suppliers.”
4)	“We returned those goods on December 2.” You determined that the goods were received by Buff Brewing on December 29, but not recorded until January 2.
5)	The confirmation request sent to Canyon Roadhouse was returned by the postal service as “return to sender, address unknown.”

A.	Verify the terms of the transaction.
B.	Exception; propose an adjustment.
C.	Send a second confirmation request to the customer (verify address or list specific invoices if needed).
D.	Not an exception; no further audit work is necessary.
E.	Examine shipping documents and/or subsequent cash receipts.

Answer rating: 100% (QA)

Particulars Action You received no reply to a negative confirmation request to Joe ... View the full answer