ACC 450 Ch 11 Part 3

The auditors obtain audit evidence for accounts receivable by using positive or negative confirmation requests. Under which of the following circumstances might the negative form of the accounts receivable confirmation be useful?

A low exception rate is expected.

To test the existence assertion for recorded receivables, an auditor would select a sample from the:

Accounts receivable subsidiary ledger.

The confirmation process may be performed using a(n): Paper form Electronic form A. Yes Yes B. Yes No C. No Yes D. No No

B. Yes No

Tracing copies of sales invoices to shipping documents will provide evidence that all:

Billed sales were shipped.

The individual looking for guidance on revenue recognition is most likely to appropriately review:

FASB ASC 606.

The confirmation of accounts receivable is most closely associated with:

Detection risk.

The audit working papers often include a client-prepared, aged trial balance of accounts receivable as of the balance sheet date. This aging is best used by the auditors to:

Estimate credit losses.

Tracing recorded sales transactions to the bills of lading provides evidence about the:

Occurrence of sales transactions.

To verify that all sales that have been shipped to customers have been recorded, a test of transactions should be completed on a representative sample drawn from:

The shipping clerk's file of duplicate copies of bills of lading.

To obtain the best evidence regarding the completeness of recorded accounts receivable, the auditors:

Trace a sample of the bills of lading to sales invoices.