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1-3. The auditor determines that both of the following objectives will be part of the audit of Anthony Company. For each of the following audit objectives, select the substantive test that would most likely provide support for the objective. A substantive test may be used once, more than once, or not at all. Substantive Tests 1. Objective Verify existence of accounts receivable. Determine that accounts receivable are valued at their net realizable value Determine that proper receivable disclosures are presented. 2. 3. Compare recognized revenue to related industry statistics. Perform receiving cutoff procedures. Perform tests of subsequent cash receipts after the balance sheet date. Read the financial statements (including notes) for completeness. Review and assess an aging schedule of accounts receivable. Review payments to vendors subsequent to year-end. Tour the storage facility for inventory to determine adequacy of security controls. 4. The existence of which of the following is most likely to increase audit risk in an audit client? O Anthony Company was started as a local family business and has received additional funding over the years from several investors. O A new CFO is redesigning Anthony's accounting policies and procedures. O Anthony Company consists of three core business operationsproduct sales in its retail store, product sales to food and specialty stores, and food services. The company experienced significant sales growth during its history and continues to expand its product offerings and market reach. 5. Which of the following is most likely to increase days' sales in accounts receivable at the end of the year for Anthony Company? Credit terms were restricted on several large accounts during the current year. Operating expenses increased at a higher rate than sales revenue. O Sales revenue increased at a higher rate than operating expenses. O A smaller percentage of sales occurred during the last month of the year, as compared to the prior year. O A larger percentage of sales occurred during the last month of the year, as compared to the prior year