Question
As part of the fieldwork of an audit engagement, the senior on the audit obtained and documented an understanding of the company's internal control relating
As part of the fieldwork of an audit engagement, the senior on the audit obtained and documented an understanding of the company's internal control relating to accounts receivable and assessed control risk related to accounts receivable at the maximum level. Alejandro, the staff person assigned to the engagement, requested and obtained from the company an aged accounts receivable schedule listing the total amount owed by each customer as of December 31, 2017, and sent positive confirmation requests to a sample of the company customers. Review Alejandro's comments on each of the following five confirmations and determine the best conclusion and/or follow-up procedures for each item. Assume that each confirmation has been signed with the appropriate signature unless otherwise noted.
February 1, 2018 West Coast Ski Center, Inc. 163 Tide Avenue Monterey, California 93940 Re: Balance at December 31, 2017 - $414,000 Dear Sirs: As of December 31, 2017, our records indicate your balance with our company as the amount listed above. Please complete and sign the bottom portion of this letter and return the entire letter to our auditors, JS LLP, PO Box 100, Orlando, Florida 32806. A stamped, self-addressed envelope is enclosed for your convenience. Sincerely, Aquatic Jet Products, Inc.
If incorrect, please provide information that could help to reconcile your account.
Response: We made a payment of $94,000 on December 12, 2017.
Signature..............Title
..............................Date
Alejandro's note to file:
Per discussion with the controller, the company received the payment of $94,000 on December 15, 2017, and posted it to ?Other Income.?
The above balance is X Correct Incorrect (show amount) $320,000
Step by Step Solution
3.45 Rating (158 Votes )
There are 3 Steps involved in it
Step: 1
Account receivable is the amount that is due from all the persons to whom a person has sold go...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Document Format ( 2 attachments)
609500c129801_25449.pdf
180 KBs PDF File
609500c129801_25449.docx
120 KBs Word File
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started