Assertions are expressed or implied representations by management that are reflected in the financial statement components. The auditor performs audit procedures to gather evidence to test those assertions. Required: Your client is All's Fair Appliance Company, an appliance wholesaler. Select the most appropriate audit procedure from the following list and enter the number in the appropriate place on the grid. (Each audit procedure will be used once and only once.) Audit Procedure: 1. Review of bank confirmations and loan agreements. 2. Review of drafts of the financial statements. 3. Select a sample of shipping documents, match them with related sales invoices, and determine that they have been inchided in the sales journal and accounts receivable subsidiary ledger. 4. Select a sample of shipping documents for a few days before and after year-end. 5. Confirmation of accounts receivable. 6. Review of aging of accounts receivable with the credit manager. Assertion Audit Procedure a. Ensure that the entity has legal title to accounts receivable (rights and obligations). b. Determine that recorded accounts receivable include all amounts owed to the client (completeness). c. Verify that all accounts receivable are recorded in the correct period (cutoff) d. Ensure that the allowance for uncollectible accounts is properly stated (accuracy, valuation, and allocation). e. Confirm that recorded accounts receivable are valid (existence). f. Ensure that all revenue related disclosures are made in the financial statements