Juanita Rosa’s auditing firm is conducting an external audit of TYY Inc.’s financial statements (for the period ended December 31, 2016). The audit manager has assigned Juanita to analyze the replies for the confirmations sent to TYY’s accounts receivables, and also to prepare the aging of the accounts receivables, segregating accounts into 30, 60, 90, and 120 days. Juanita reviewed the confirmations, which had asked customers to reply whether they agreed with the recorded amount or not, and compared the confirmation with the recorded amount. When the amounts agreed, Juanita concluded that the recorded amount was accurate. Juanita then used an approximation (found in last year’s audit working papers) of 1 percent of the 30-day group, 4 percent of the 60-day group, 6 percent of the 90-day group, and 30 percent of the 120-day group to determine collectibility. 

Required 

(a) Explain three additional steps Juanita should take to determine the collectibility of the accounts receivable. 

(b) Indicate whether the confirmations are positive or negative confirmations. Briefly explain your answer.