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A customer selected by the auditor for A/R confirmation responds to the confirmation with the following statement: Merchandise not received until January 4, 2022. An
A customer selected by the auditor for A/R confirmation responds to the confirmation with the following statement: "Merchandise not received until January 4, 2022". An alternative procedure the auditor can perform for this confirmation is which of the following: Examine subsequent cash receipts after year end to verify customer did NOT pay for items shipped. Examine subsequent cash receipts after year end to verify customer paid for items shipped. Examine shipping documents to verify item as shipped FOB shipping point AFTER year end. Examine shipping documents to verify item as shipped FOB shipping point PRIOR to year end. A company sells 100 items @ \$12 per item on December 27.50 of the items ship FOB destination on December 28 and arrive on December 31 , however, they are not recorded by the customer until January 3. What amount should the company record as sales as of December 31 ? Not enough information to determine the amount 600 1200 An auditor is reviewing prior year workpapers and realizes that in prior years' audits, no reliance was placed on internal controls. In conversations with the client, the auditor believes that some reliance on internal controls is will be possible for the current year. Assuming the audit risk and inherent risk associated with the sales and collection cycle has not changed from prior years, what will be the impact on the number of accounts receivable confirmations sent this year, assuming that reliance on internal controls is justified? Cannot be determined with the information provided. No impact on sample size Decrease in sample size Increase in sample size
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