The assets of Capital Western Wear Shop at May 31, 19X7, are listed below:

During the course of your annual audit of the company's financial statements, the owner will not permit circularization of the accounts receivable because the customers would resent it.

1. State the conditions, if any, under which you would render an unqualified opinion on the financial statements.

2. Describe generally the major audit procedures you would use to audit the accounts receivable to satisfy yourself as to their validity, considering the imposed limitation.

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Assets Cash Accounts receivable (net) Merchandise inventory Equipment (net) Total Amount $ 60,000 190,000 460,000 105,000 $815,000