In the confirmation of accounts receivable for Millbank Service Company Inc., 85 positive and no negative confirmations were mailed to customers. This represents 35 percent of the dollar balance of the total accounts receiv¬ able. For all nonresponses, second requests were sent, but 10 customers still did not respond. The decision was made to perform alternative procedures on the 10 unanswered confir¬ mation requests. An assistant is asked to conduct the alterna¬ tive procedures and report to the senior auditor after completing his tests on two accounts. He prepared the fol¬ lowing information for the working papers:

Required

a. If you were called upon to evaluate the adequacy of the sample size, the type of confirmation used, and the per¬ centage of accounts confirmed, what additional informa¬ tion would you need?

b. Discuss the need to send second requests and perform alternative procedures for nonresponses.

c. Evaluate the adequacy of the alternative procedures used for verifying the two nonresponses.

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1. Confirmation request no. 9 Customer name: Jolene Milling Co. Balance: $3,621 at December 31, 2001