J M Lumber Corporation December 3 1 , 2 0 X 6 Year End Audit Engagement Planned Substantive Procedures for the Audit of Accounts Receivable, Net Select an audit procedure to achieve the audit objectives below For each objective, enter the letter corresponding to the audit procedure in the space provided and justify your response Audit procedures may be used once, more than once, or not at all Audit Procedures Inspect invoices and shipping documents for recorded sales Understand J M s internal controls over sales transactions Test the allowance for doubtful accounts and evaluate its adequacy Perform sales cutoff tests for two weeks before and after the balance sheet date Review Board of Director s meeting minutes for sales to related parties Review the year end financial statements and footnotes Confirm accounts receivable at the balance sheet date Audit Objectives 1 Determine whether sales and receivables transactions are recorded in the appropriate year Audit Procedure Explanation 2 Determine whether receivables are recorded at net realizable value per GAAP Audit Procedure Explanation 3 Determine whether the financial statements include all disclosures required by GAAP Audit Procedure Explanation 4 Determine whether J M has the right to receivables recorded at the balance sheet date Audit Procedure Explanation 5 Determine whether receivables recorded at the balance sheet date exist Audit Procedure Explanation

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J   M Lumber Corporation December 3 1 , 2 0 X 6 Year   End Audit Engagement Planned Substantive Procedures for the Audit of Accounts Receivable, Net Select an audit procedure to achieve the audit objectives below  For each objective, enter the letter corresponding to the audit procedure in the space provided and justify your response  Audit procedures may be used once, more than once, or not at all  Audit Procedures  Inspect invoices and shipping documents for recorded sales  Understand J   M s internal controls over sales transactions  Test the allowance for doubtful accounts and evaluate its adequacy  Perform sales cutoff tests for two weeks before and after the balance sheet date  Review Board of Director s meeting minutes for sales to related parties  Review the year   end financial statements and footnotes  Confirm accounts receivable at the balance sheet date  Audit Objectives  1   Determine whether sales and receivables transactions are recorded in the appropriate year  Audit Procedure                  Explanation                                                                                                                                          2   Determine whether receivables are recorded at net realizable value per GAAP  Audit Procedure                  Explanation                                                                                                                                          3   Determine whether the financial statements include all disclosures required by GAAP  Audit Procedure                  Explanation                                                                                                                                          4   Determine whether J   M has the right to receivables recorded at the balance sheet date  Audit Procedure                  Explanation                                                                                                                                          5   Determine whether receivables recorded at the balance sheet date exist  Audit Procedure                  Explanation

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J & M Lumber Corporation December 3 1 , 2 0 X 6 Year - End Audit Engagement Planned Substantive Procedures for the Audit of

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