Question
As part of the accounts receivable confirmation process, you have asked your client to sign and send the following confirmation to a number of customers.
As part of the accounts receivable confirmation process, you have asked your client to sign
and send the following confirmation to a number of customers.
Carmen Chin's Fashion House (Singapore) Pte. Ltd.
8-8-8 Plaza Temasek
Orchid Road
Singapore
14 February 2018
Name and Address of Client
To Whom It May Concern,
In connection with an audit of our financial statements, please confirm directly to our auditors the correctness of the balance of your account as of December 31, 2017, as shown below.Our auditor's contact details are as follows: Pinto and Patel, CPAs, 8th Floor Plaza Geylang, Geylang, Singapore, Tel:(65)5844 8556.
This is not a request for payment; please do not send your remittance to our auditors. Your prompt attention to this request will be appreciated.An envelope is enclosed for your reply.
Tan KhiaSzeKesha (Ms)
Finance Director
The balance receivable of $xxx as of 31 December 2017 is correct except as noted below.Your receptionist received the following replies:
1. Lim See Kooi of Lim Brothers Pte.Ltd.: My father's company Lim Tee Pu Pte.Ltd. wound up after my father died 3 years ago.We don't owe you $5,000.Ask my brother Lim See Pek.He is in charge of Lim Tee Pu Pte.Ltd.
2. Jennifer Low: I did not receive the clothes I ordered on 30 December 2017 costing $3,000 on time.So I am not paying this.I received the shipment on 17 January 2018.This invoice is not due.
3. Mat Isa NasiKandar: Sorry, I forgot to pay for a table cloth I ordered for Valentine's Day last year.Here is a check for $2,000.
4. Mary Hathaway-Berkshaw (telephone call): I have transferred $500 to your account at Maybank online on 3 January 2018.Today is Valentine's Day.You should have updated my account.
Required :
Describe the implication of the above confirmation responses and the follow-up actions you will take as auditor.
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