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:

Business Intelligence

The strategies and technologies used by enterprises for data analysis of business information to support decision making.

Oligopoly

A market structure dominated by a small number of firms, leading to limited competition and possibly higher prices for consumers.

Utilitarianism

An ethical theory that suggests the best action is the one that maximizes utility, typically defined as that which produces the greatest well-being of the greatest number of people.

Moral Philosophy

The branch of philosophy dealing with values relating to human conduct, with respect to the rightness and wrongness of certain actions and to the goodness and badness of the motives and ends of such actions.