Question
Assertions: Existence Occurrence Completeness Cutoff Valuation Accuracy Presentation Disclosure Lawrence & Harcourt (L&H) was the world's leading provi&r ot speech reccvition techndogy produds, solutions, and
Assertions:
Existence
Occurrence
Completeness
Cutoff
Valuation
Accuracy
Presentation
Disclosure
Lawrence & Harcourt (L&H) was the world's leading provi&r ot speech reccvition techndogy produds, solutions, and services to businesses and individuals worldwide, 80th Microson and Intel invested millions in L However, accounting scandals and fraud allegations sent the company's stock crashing and forced the fim to seek bankruptcy protection in France and the United States. The rdlowirp seleded information pertains to L&H's sales and accounts receivable: Consolidated revenue increased 184 percert from the 1997 fiscal year to the 1998 fiscal year. Revenue in Singapore which has a reputation as a difficdt market for foreign companies to enter, increased frcm Sg7 ,OOO in the tirst quarter ot 1 gggto approximately S5g million In the tirstquarter ot 2000. In the second quarter ot 2000. sales grew by 104 peent but accounts receivable grew by 128 percert. Average days Outstanding increased from 138 days in 1998 to 160 days Tor the six-month ended June 30, 2000. L&H's auditor did not confirm accounts receivable trom customers in Singapore. However, The Wal' Street Journal contacted 18 ot L&H's Singaporean customers and learned the tollmving Three out of 18 customers listed by L&H stated that theywere not L&H customers. Three others indicated that their purchases from L&H were smaller than those reported by L&H Note: Answerthe questions as comprehensivety as possiDE Reference to Auditing Standards, yourtexD00k, and other relevant authorinttve sources is expted where appropriate a. b. Based on the above information. which assertion(s) for accounts receivable should the auditor be most concaved with? Why? What audit evidence should the auditorgather to verity the assertion(s) icfertitled in (a)? Be specific as to how each type ot evidence relates to the assertions
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