Question
Your task was to audit the existence assertion of accounts receivable, the balance of which as of September 30, 2020 is $420,000. Date Name of
Your task was to audit the existence assertion of accounts receivable, the balance of which as of September 30, 2020 is $420,000.
| Date | Name of customer | Amount |
| 05-Jun | Jessica Greene | $430 |
| 08-Nov | John Black | $270 |
| 04-Jan | Randy White | $120 |
| 12-Feb | Melissa Redd | $540 |
| 08-Nov | Will Grey | $270 |
You examined the supporting documentation and realized that the transaction recorded for Melissa Redd was not recorded correctly: the shipment was for two items, $170 each, so it should have been recorded as $340 instead of $540. Assume the overall materiality is $80,000, the performance materiality is $50,000.
Does the result of your test suggest a potential material misstatement in revenues? Explain! (6 marks)
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Auditing Theory And Practice
Authors: Roger H. Hermanson
1st Edition
0256023301, 978-0256023305
