Question
Q4- i. TEST THE SAMPLE & EVALUATE THE RESULTS: Assume You send a total of 44 confirmations: 43 confirmations as determined by the Non-stat calculation
Q4- i. TEST THE SAMPLE & EVALUATE THE RESULTS: Assume You send a total of 44 confirmations: 43 confirmations as determined by the Non-stat calculation above and 1 that was judgmentally selected because it was greater than performance materiality. A selection of the confirmation results for the Company is shown below. Assume the remaining 40 items samples were returned and the book value was the same as the value per the confirmation (aka audit value).
Confirmation | Sample Type | Customer Name | Recorded | Amount | Evaluation | |
Number | Balance | Confirmed by | of | |||
Customer | Results | |||||
Strata 1 | 1 | Representative sample selected haphazardly by non-statistical sampling. | Snapchat Corporation | $15,000 | Confirmation reply not received from customer, but alternative procedures performed successfully. | Answer below. |
2 | Representative sample selected haphazardly by non-statistical sampling. | $66,000 | $64,000 | |||
3 | Representative sample selected haphazardly by non-statistical sampling. | Tesla | $20,000 | $19,800 | ||
Strata 2 | 4 | Judgementally Selected | Specimen Inc. (a related party) | $300,000 | $250,000 |
Q4-ii. On the basis of the accounts receivable confirmation results received (as presented above), what are the conclusions for each of the sample items selected?
Confirmation Number | Evaluation of Results: (A)Difference needs further investigation; (B)No Difference- no further investigation required; or (C) Cannot be Determined [Put only 1 letter below] | ||
1 | [EX: (A)] | ||
2 | |||
3 | |||
4 |
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