16-24 (Objectives 16-1 , 16-2 , 16-3 ) The following are common tests of details of balances...
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16-24(Objectives16-1,16-2,16-3) The following are common tests of details of balances or substantive analytical procedures for the audit of accounts receivable:
- Select 20 customer accounts from the accounts receivable master file and trace to the aged accounts receivable listing to verify name and amount.
- Select 20 customer accounts from the aged accounts receivable listing and trace to the accounts receivable master file for name, amount, and aging categories.
- a bar chart showing amounts and percentages of accounts receivable in each aging category for the current and prior year and evaluate trends.
- Obtain a list of aged accounts receivable, foot and cross-foot the list using audit software, and trace the total to the general ledger.
- Compute accounts receivable turnover for the current year and compare to the prior year and to the industry average.
- Perform alternative procedures on accounts not responding to second requests by examining subsequent cash receipts documentation and shipping reports or sales invoices.
- Request 50 positive confirmations of accounts receivable.
Required
- For each audit procedure, identify the balance-related audit objective or objectives it partially or fully satisfies.
- In which order would the auditor perform the seven procedures? Briefly justify your answer.
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