Exam 16: Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

It is common to use a combination of positive and negative confirmations by sending the latter to accounts with large balances and the former to those with small balances.

A type of positive confirmation in which an individual invoice is confirmed, rather than the customer's entire accounts receivable balance is the ________ confirmation.

Discuss the audit procedures performed when testing the detail tie-in objective for accounts receivable, and explain why this objective is ordinarily tested before any other objectives for accounts receivable.

How might the auditor determine whether a client has limited rights to accounts receivable?

For sales, the occurrence transaction-related audit objective affects which of the following balance-related audit objective?

Cutoff misstatements occur:

When analytical procedures in the sales and collection cycle uncover unusual fluctuations, the auditor should make additional inquiries of management.

Cutoff misstatements can occur for:

Blank confirmations are considered less reliable than standard positive confirmations.

A customer mails and records a check to a client for payment of an unpaid account on December 30.The client receives and records the amount on January 2.The records of the two organizations will be different on December 31.This represents:

Describe how the auditor tests the accuracy objective for accounts receivable.

Which of the following audit procedure would normally be included in the audit plan when auditing the allowance for doubtful accounts?

The most reliable evidence from confirmations is obtained when they are sent:

Which of the following audit procedures would not likely detect a client's decision to pledge or factor accounts receivable?

When a customer disagrees with the amount shown on an account receivable confirmation, the auditor should not ask the client to reconcile the difference.

For most audits, a proper cash receipts cutoff is less important than either the sales or the sales returns and allowances cutoff since cash only affects the balance sheet, and not earnings.

Confirmation of accounts receivable balances normally provides evidence concerning the:

Analytical procedures:

The appropriate and sufficient evidence to be obtained from tests of details must be decided on an:

Which of the following most likely would be detected by a review of a client's sales cutoff?