The auditor wishes to use GAS to assist in the audit of accounts receivable. The auditor's major objectives are to:
• Evaluate existence by sending confirmations to customers.
• Evaluate adequacy of allowance for doubtful accounts by:
• Examining the file to determine if credit limits had been overridden.
• Aging A/R.
• Analyzing composition of credit by credit rating.
• Sampling receivables to determine if credit rating that is assigned is appropriate.
• Developing a model that considers economic factors in adjusting the allowance.
• Test valuation through various mechanical tests.
• Test obligations through an examination of credit memos.
Required
a. Identify how GAS can assist the auditor in performing each of these tasks.
b. Indicate which of the tasks require sampling, as opposed to a file validity analysis.