Forest & Glen, CPAs, has been engaged to audit Shipps Machinery for the year ended December 31, Year 1.

Shipps Machinery

Select Accounts as of 12/31/Year 1

Cash

$1,523,000

Accounts receivable

298,500

PP&E

2,485,600

Investments

198,500

Accounts payable

245,200

Contingencies

200,000

Long-term debt

1,526,000

To check the existence assertion for Accounts Receivable, the auditor sent accounts receivable confirmations to 50 customers on 1/10/Year 2. Forty-five of the confirmation responses were received back by mail, four confirmations were not received back and were tested without excep

tion using alternative procedures, and one confirmation response was received by email on 2/1/Year 2 (see "E-mail From Customer" at below).

E-mail From Customer Kasey Kramer From: hbrown@customer.net Sent: February 1, Year 2 9:01AM To: kt@auditor.com Subject: Confirmation #34 Kasey, I am e-mailing to confirm the accuracy of the confirmation you sent on January 10th. Regards, H. Brown CFO, Customer.net