Auditing a Subsidiary’s Intercompany Receivable You are the audit senior (in charge of the field work) for a parent’s 100%-owned subsidiary that is a financial institution and issues its separate financial statements to regulatory authorities. The subsidiary has a very large intercompany receiv¬

able (30% of total assets and 500% of stockholders’ equity) from its parent company. The balance in this account increased from $10 million to $300 million in the past three years. The parent is audited by a different auditing firm.

Required 1. What specific audit procedures would you perform in auditing this receivable?

2. If you believe that substantially more audit work is necessary than the audit partner does, how would you resolve such an impasse?