Question
Part II. L&H's auditor did not confirm accounts receivable from customers in South Korea. However, The Wall Street Journal contacted 18 of L&H's South Korean
Part II. L&H's auditor did not confirm accounts receivable from customers in South Korea. However, The Wall Street Journalcontacted 18 of L&H's South Korean customers and learned the following:
Three out of 18 customers listed by L&H stated that they were not L&H customers.
Three others indicated that their purchases from L&H were smaller than those reported by L&H.
Required:
a. | If L&H's auditor had confirmed these receivables and received such responses, what additional evidence could he or she have gathered to try to obtain an accurate figure for sales to and accounts receivable from customers in South Korea? |
b. | If you were L&H's auditor and you had received such responses from South Korean customers, how likely would you be to use inquiry of the entity's personnel as an audit procedure? Why? |
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