25. The assertions for which confirmation of accounts receivable balances provides primary evidence are

A) Completeness and valuation.

B) Valuation and obligations.

C) Rights and existence.

D) Existence and completeness.

26. An auditor selected items from warehouse floor for test counts while observing a clients physical inventory counting. The auditor then traced the selected test count items to the clients inventory compilation list. This tracing test most likely obtained evidence concerning the relevant assertion about

A) Rights.

B) Completeness.

C) Existence.

D) Valuation.

27. Upon receipt of customers checks in the mail room, a responsible employee should compile all payment documents and prepare a control listing that is forwarded to the cashier. A copy of the listing should be sent to the

A) internal audit department manager to investigate the listing for unusual transactions.

B) CFO to compare the listing with the monthly bank statement.

C) accounts receivable bookkeeper to update the subsidiary accounts receivable records.

D) purchase department to verify past purchases.

28. An auditor noted that the accounts receivable department is separate from other accounting activities (e.g. A/P, payroll). Credit is approved by a separate credit department. And subsidiary accounts balances are aged monthly. The accounts receivable manager authorizes and writes off delinquent accounts after one year, or sooner if one customer is bankrupt. Which of the following areas could be viewed as an internal control deficiency of the above organization?

A) Credit approvals.

B) Monthly aging of receivables.

C) Efficiency loss due to separation of A/R department from other accounting activities.

D) Write-offs of delinquent accounts.