Below Are Five Audit Procedures, All of Which Are Tests

question 129

Short Answer

Below are five audit procedures, all of which are tests of balances associated with the audit of accounts receivable. Also, below are the eight general balance-related audit objectives and the four management assertions. For each audit procedure, indicate (1) its audit objective, and (2) the management assertion being tested.
1. Obtain an aged listing of accounts receivable. For a sample of individual customers on the listing, agree the customer's name, amount, and other information with the corresponding information in the accounts receivable master file.
(1) ________
(2) ________
2. Examine details of sales for five days before and five days after year-end to determine whether sales have been recorded in the proper period.
(1) ________
(2) ________
3. Assess the reasonableness of the balance in the allowance for doubtful accounts.
(1) ________
(2) ________
4. Inquire as to whether any accounts receivable have been factored or sold during the period.
(1) ________
(2) ________
5. Inquire as to whether there are any receivables from related parties.
(1) ________
(2) ________

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Definitions:

Norms

Shared guidelines or rules of behavior that dictate what is considered proper or improper within a group or society.

Core Features

Essential characteristics or attributes that define a concept, object, or phenomenon.

Virtual Team

A group of individuals who work together from different geographic locations, relying on digital communication technologies.

Superordinate Goals

Objectives that require the cooperation of two or more individuals or groups to achieve, which can help to reduce conflict and increase collaboration.