A)An Auditor Is Concerned That Accounts Receivable May Be Understated

question 3

Essay

A)An auditor is concerned that accounts receivable may be understated due to sales to customers that have been omitted from the sales journal and from the accounts receivable master file.Describe the procedure(s)the auditor should perform in these circumstances.B)Describe how the auditor tests the classification objective for accounts receivable.

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Definitions:

Leeward

The side sheltered from the wind, often used in reference to the direction opposite to the prevailing wind.

Mountain

A large natural elevation of the earth's surface rising abruptly from the surrounding level; a large steep hill.

Coastal Breezes

Wind currents that are generated by the temperature difference between the land and the ocean, with the land absorbing and releasing heat faster than the water.

Lichens

Symbiotic organisms consisting of a fungus and an alga or cyanobacterium, living together and often found on rocks or trees.