Confirmations of Receivables. You Are the Auditor of Maple Bank for the Year

question 17

Essay

Confirmations of receivables.
You are the auditor of Maple Bank for the year 2010. Maple has a large number of customers with consumer loan accounts. The loan accounts have balances averaging $800 in a homogeneous population and the customers usually pay close attention to their balances.
Your preliminary assessment of internal control over the loan area is that control risk is low and results of tests of controls support that assessment. Inherent risk is deemed to be lower as well.
Discuss the confirmation process and the types of confirmations that may be used for the audit of Maple Bank. Which confirmation type would you select for Maple and why?

Determine appropriate procedures for hardware disposal containing sensitive data.

Explain the administration of user accounts in various contexts.

Understand the application of technology in inventory and access management.

Describe procedures for troubleshooting and resolving software issues.

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Definitions:

Purchasing Department

The division within an organization responsible for acquiring goods, services, and equipment necessary for its operations.

Weighted Average Cost Flow Assumption

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the average cost of all similar items available during the period.

LIFO

Last In, First Out, an inventory valuation method where the most recently produced items are recorded as sold first.

FIFO

An inventory valuation method where the first items produced or purchased are the first used or sold.