Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. background: audit standards indicate that there

BACKGROUND: Audit standards indicate that there is a presumption that auditors will...

70.2K

Verified Solution

Question

Accounting

BACKGROUND:

Audit standards indicate that there is a presumption that auditors will confirm accounts receivable unless the balance is immaterial, confirmations are deemed ineffective, or the auditors' assessment of risk is low and other procedures will achieve the same objective. However, these instances are considered few and far between and current trends in auditing indicate that there is an expectation that accounts receivable will be confirmed. Auditors may stratify the population, use haphazard or judgmental sampling, and send positive or negative requests.

Jenner & Jenner CPAs are the auditors for the Leno Company. In reviewing the accounts receivable aging, the auditors learn that there is a high number of accounts with balances, there are some very large and very small balances, and many customers' balances consist of multiple invoices.

How should the auditors mitigate the risk associated with both very large and very small balances?

Because so many customer balances consist of multiple invoices, what could the auditors do to eliminate unnecessary reconciliation?

Should Jenner & Jenner CPAs send accounts receivable confirmations?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Accounting
1.2K views

Internal control procedures are important in every business. At what stage in the development of a...

Statistics
1.2K views

A simple random sample of 90 items from a population with σ = 7 resulted in...

Statistics
1.2K views

Why is the standard deviation of the bootstrapped distribution smaller than that of the sample?

Biology
1.2K views

In humans birth tends to be difficult Babies need to grow as large of a...

Statistics
1.2K views

1 2 3 4 5 SUM 1 2 5 8 10 11 17 21 23...

Calculus
1.2K views

2 g x x 1 4 Graph the function g if x 3 if 3...

Accounting
1.2K views

Create a process map of Hank the Handyman's work process (use Excel; Insert > Shapes...

Accounting
1.2K views

Requirement 1. Use these data to write Burn Foods' accounting equation. Now enter the amounts...

Accounting
1.2K views

The basis of property inherited from a decedent is generally the __________. Purchase price of...

Accounting
1.2K views

Which of the following pair of journal entries correctly records the current month's activity where...

Finance
1.2K views

Which of the following is NOT one of the steps taken in the financial planning...

Finance
1.2K views

B. Aishah Abdullah recently won RM2 million from the Bank Simpanan Nasional Sijil Simpanan Premium...