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The audit program for accounts payable for a client has been drafted, ensuring that the account is not understated. The auditor believes that the key

The audit program for accounts payable for a client has been drafted, ensuring that the account is not understated. The auditor believes that the key assertion at risk is cut-off and needs to be tested by sending confirmations to creditors.

  1. Explain whether the current audit process is appropriate. If not, suggest the appropriate process.
  2. Suggest one sampling method that can be used to test cut-off assertion. Justify your answer.
  3. The results of the testing of accounts payable are as follows

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If the overall tolerable error was set at $62 000, what action would you take?

Stratum 1 2 Error found Sample total value Stratum total value $ 15,560.00 $ 156,500.00 $ 216,004.00 $ 5,946.00 $ 56,420.00 $ 85,641.00 $ 11,253.00 $ 78,560.00 $ 123,560.00 $ 7,200.00 $ 15,400.00 $ 35,800.00 $ 39,959.00 $ 306,880.00 $ 461,005.00 3 4 Total Stratum 1 2 Error found Sample total value Stratum total value $ 15,560.00 $ 156,500.00 $ 216,004.00 $ 5,946.00 $ 56,420.00 $ 85,641.00 $ 11,253.00 $ 78,560.00 $ 123,560.00 $ 7,200.00 $ 15,400.00 $ 35,800.00 $ 39,959.00 $ 306,880.00 $ 461,005.00 3 4 Total

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