Miller, CPA, is engaged to audi the fin ancial statemerks of Superior Wholesaling for the year ended December 31, 1996. Miller obeained and documented an understanding of Superion's internal connrol relating to accounts receivable and assessed control risk relating to accounts receivable at the maximum level. Miller reguested and obained from Superior an aged accounus receivable scheatule listing the total amount owed by each customer as of December 31, 1996, and sent positive confirmation requests to a sample of the customers. Subsequently, - Miller tested the accuracy of the aged accounts recejvable schedule. Miller has asked Adler, the staff assistant assigned to the engagement, 10 folow ip on the eight retuned confimations that appear on the folowing two pages. Assume that each confirmation is material if the potextial misstatement is projected to the population. Required a. Describe the procedure(s), if any, tha Ader should perform toresolve each of the eighl confirmations that were retumed. Assume tha Superior will record any necessary adjugting entries and that Ader win verify that they arc appropriate. b. Assume that Miller sent second reguests for accotntis receivable balances initially selected for confimation for which no responses were received Describe the alternative sulstantive procedures that Miller should consider applying to the accounts receivable sclected for confirmation for which no responses were received to Miller's second reguests. Assume that these acoounts receivable in the aggregate, when projected as nisstateinents to the population, woul affect Miller's decision aboul whether the financial statements are materially misstated. c. In addition to performing the confirmation procedures and alternative procedures described in reguirements a and b and the procedures described in the first paragraph above, what adifitional substanti ve procedures should Miler consider performing to complete the audit of Stperior's accounts receivable and related albw ances? A ssume that all accounts receivable are trade receivables Miller, CPA, is engaged to audi the fin ancial statemerks of Superior Wholesaling for the year ended December 31, 1996. Miller obeained and documented an understanding of Superion's internal connrol relating to accounts receivable and assessed control risk relating to accounts receivable at the maximum level. Miller reguested and obained from Superior an aged accounus receivable scheatule listing the total amount owed by each customer as of December 31, 1996, and sent positive confirmation requests to a sample of the customers. Subsequently, - Miller tested the accuracy of the aged accounts recejvable schedule. Miller has asked Adler, the staff assistant assigned to the engagement, 10 folow ip on the eight retuned confimations that appear on the folowing two pages. Assume that each confirmation is material if the potextial misstatement is projected to the population. Required a. Describe the procedure(s), if any, tha Ader should perform toresolve each of the eighl confirmations that were retumed. Assume tha Superior will record any necessary adjugting entries and that Ader win verify that they arc appropriate. b. Assume that Miller sent second reguests for accotntis receivable balances initially selected for confimation for which no responses were received Describe the alternative sulstantive procedures that Miller should consider applying to the accounts receivable sclected for confirmation for which no responses were received to Miller's second reguests. Assume that these acoounts receivable in the aggregate, when projected as nisstateinents to the population, woul affect Miller's decision aboul whether the financial statements are materially misstated. c. In addition to performing the confirmation procedures and alternative procedures described in reguirements a and b and the procedures described in the first paragraph above, what adifitional substanti ve procedures should Miler consider performing to complete the audit of Stperior's accounts receivable and related albw ances? A ssume that all accounts receivable are trade receivables
