3. You are the Director of Internal Audit for a large privately operated hospital. You receive monthly financial reports prepared by the Accounting Department; your review of these reports show that total accounts receivable from patients has steadily and rapidly increased over the past 8 months. Other information in the monthly report reveals:

. Number of available hospital beds has not changed

. The bed occupancy rate has not changed

. Hospital billing rates have not significantly or materially changed

.Patient insurance contracts have not changed

Your Internal Audit department audited the accounts receivable 10 months ago and the final report commented favorably on controls over accounts receivable and timely collections of A/R. Because you are a totally together Internal Audit Director, you suddenly recall reading something about the Citys water service provider in trouble for double billing residential customers for three months.

A. Write an objective that will satisfactorily address the issue of concern expressed.

B. Outline audit procedures you believe will satisfy the audit objective