estion 29 The auditor determines that the following objectives will be part of the audit of ABC Company which has a December 31 year end for each of the following audit objectives, select the substantivo test tha would most likely provide the proper support for the determining that the objective has been met Choose only one answer from A thru ) for each Objective. OBJECTIVES: 1. Verlly existence of accounts receivable 2. Determine that accounts receivable are valued at their net realizable value Determine that proper receivable disclosures are presented 4. Determine that we have been recorded in the proper period 5. Substantiate balances for any accounts receivable where confirmations were not received back from the customer Selection List of substantive Tests A Review and assess naging schedule of accounts receivable along with formation for subsequent collections B. Compare recognized revenue to related industry statistics. Tout the storage facility for inventory to determine adequacy of security controls D. Send confirmations to customers Read the financial statements including notes) R.Collect shipping information (ils of lading from the departments or locations from which products are shipped to the customers for the last five shipments in December and the first shipments in January and determine that the shipments were appropriately recorded in the correct month's register/led 6. Examine wash collection and/or examine evidence of sale/shipment such as the three-way match of related documents Hinquire about und obrve the procedures being performed by the same invoice personnel Dis the process used by the Credit Manager and the validity of his/her supporting anformation used to set the credit konts for each new and uting customer Review and testety welcome and perform analysis of the current year to the previous year The auditor determines that the following objectives will be part of the audit of ABC Company - which has a December 31 would most likely provide the proper support for the determining that the Objective has been met. Choose only one a OBJECTIVES: 1. Verify existence of accounts receivable 2. Determine that accounts receivable are valued at their net realizable value 3. Determine that proper receivable disclosures are presented 4. Determine that sales have been recorded in the proper period 5. Substantiate balances for any accounts receivable where confirmations were not received back from the customer Selection List Substantive Tests A Review and assess an aging schedule of accounts receivable along with information for subsequent collections B. Compare recognised revenue to related industry statistics Tour the storage facility for inventory to determine adequacy of security controls D. Send confirmations to customers E lead the financial statements including notes) F. Collect shipping information (bill of lading, etc) from the departments or locations from which products are shipped to the customers for the last five shipments in December and the first to shipments in wary and determine that the shipments were appropriately recorded in the correct month's sales register/leder 6. Emine subsequent cash collections and/or examine evidence of sale/hipment such as the three-way match of related documents H.Inquire about and observe the procedures being performed by the sales invoicing personnel Discuss the process used by the credit Manager and the validity of his/her supporting information used to set the credit limits for each new and existing customer Review and text entity level controls and perform analytical/rationalis of the current year to the previous year
