Hi, I'm trying to figure out this question but I think I'm on the wrong track, I initially thought for "A" that the audit implications were that AR has increased but sales haven't indicating fictitious AR being recorded but I'm not sure if thats the case. Additionally, I thought the other implication was that AR has increased significantly but allowance for doubtful accounts is relatively the same. I just don't know how thats an audit implication though.

You are conducting an audit and have obtained the following figures with respect to sales and accounts receivable: 2012 2011 Accounts receivable $ 3,343,000 2,694,000 Allowance for doubtful accounts 212,150 207,660 Sales 25,640,000 25,640,000 Required a. What are the audit implications of these figures? (2 marks) b. Identify four key audit procedures that you would perform to address the issues you identified in part a). (4 marks)