Business, 21.09.2019 03:20 gingerham1

14-30 (substantive tests of accounts receivable) the following situations were not discovered by an inexperienced staff auditor in the audit of the parson company.

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1. Several accounts were incorrectly aged in the
client's aging schedule.
Procedures: Compare age% to prior year AR -Analytical procedures.
Assertion: cutoff, Valuation and allocation.

2. The accounts receivable turnover ratio was far below
expected results.
Procedure: AR analytical test: AR/AP, AR turnover,etc.-Analytical procedures.
Assertion:Completeness, cutoff.

3. Goods billed were not shipped.
Procedure: Cutoff test of billing-test the last month invoices. Vouching to the shipping doc.-Inspection of records.
Assertion: Occurrence, cutoff.

4. Some year-end sales were recorded in the wrong
accounting period.
Procedure: cut off test of billing-test invoices billed subsequent to year end.-Inspection of records
assertion:Completeness, cutoff

5. Several sales were posted for the correct amount but to
the wrong customers in the accounts receivable ledger.
Procedure: Confirmation of billings-Confirmation
Assertion: Occurrence.

6. The allowance for uncollectable accounts was
understated.
Procedures: Test the ratio of allowance to old AR and compare to PY.
-Analytical procedures.
Assertion:Valuation and allocation

7. Several sales were entered and posted at incorrect
amounts.
Procedures: Confirmation of AR. -Confirmation
Assertion: Accuracy and valuation

8. Mathematical errors were made in totaling the accounts
receivable ledger.
Procedures: Foot AR aging.-Recalculation
Assertion: Accuracy and valuation

9. An unrecorded sale at the balance sheet date was
collected in the next month.
Procedure: Post subsequent cash to AR balance at YE. Reperformance. records.
Assertion: Completeness, cutoff.

10. Several fictitious sales were recorded.

Procedure: Confirm customer balance.-Confirmation.
assertion: Occrrence.

11. The pledging of some customer accounts as security for
a loan was not reported in the balance sheet.
Procedure: Review security agreements.-Inspection of record.
Assertion: Occurrence and rights and obligations.

12. Some year-end cash receipts were recorded in the wrong
accounting period.
Procedure: cash cutoff testing.-Inspectionof record.
Assertion: cutoff, occurrence, completeness.

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14-30 (substantive tests of accounts receivable) the following situations were not discovered by an...

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