Question 5

You are the audit manager in charge of auditing the accounts of Jamieson Ltd.Materiality for the audit has been set at $250,000.The balance date was 30 June 2020.It is the 18^thof August 2020 and you are at the client's premises to undertake the audit.The pre-audited balance of accounts receivable for Jamieson Ltd at 30 June 2020 is $925,000.The audited balance of accounts receivable as at 30 June2019 was $555,000.

Required

a)Identify and explain which assertion(s) related to accounts receivable is/are most likely to be at the greatest risk of material misstatement.

[5 marks]

b)Suggest substantive procedures to verify the assertion(s) you identified in part a and explain why the tests are appropriate in this scenario.