You Are Conducting an Audit and Have Obtained the Following

question 117

Essay

You are conducting an audit and have obtained the following figures with respect to sales and accounts receivable:
$$\begin{array} { l r r r } & \mathbf { 2 0 1 5 } & \mathbf { 2 0 1 4 } \\\text { Accounts receivable } &\$ \mathbf { 3 } 343000 & \$ 2694000 \\\text { Allowance for doubtful accounts } & 212150 & 207660 \\\text { Sales } & 25640000 & 24630000\end{array}$$
Required:
A) What are the audit implications of these figures?
B) Identify key audit steps that you would perform for any of the above accounts.

• A) What are the audit implications of these figures?
• B) Identify key audit steps that you would perform for any of the above accounts.

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Definitions:

Payables Period

The average time it takes for a business to pay its invoices and bills, reflecting the company's efficiency in managing payables.

Inventory Period

The average time a company holds inventory before selling it, directly affecting cash flow and storage costs.

Cost of Goods Sold

The direct expenses associated with manufacturing goods sold by a company.

Accounts Payable Period

The average number of days it takes for a business to pay its invoices from suppliers.