Huayu Huang
Advanced Auditing Class
1. The primary audit objective that auditors apprehend to follow out by confirming a invitees year-end accounts receivable is to streamlet the existence and valuation of the accounts receivable. By performing the confirmation with the clients customer, auditors try to contain that the accounts receivable shown on the parallelism sheet exists and is indeed the sum up owed to the client. It also tests the valuation assertion that the accounts receivable is recorded at appropriate amounts and any valuation adjustments are properly shown on the financial statements.
The primary audit objective that auditors hope to accomplish by performing year-end sales cutoff tests is to test the cutoff and completeness assertions. To test the cutoff assertion, auditors have to ensure that evidential transactions occurring near year-end are recorded in the financial statements in the proper period. The completeness assertion hailes that the ending rest shown for accounts receivable on the balance sheet includes all such assets as of the balance sheet date.
2. When the auditors are provided with an incorrect address for Wow Wees receivable, the auditors could not contact the clients customer.
They solely rely on the former chief financial officers offer to contact the appropriate individual at Wow Wee to ensure that the confirmation was returned to Coopers. However, this is a voluminous mistaking because it gives the CFO an opportunity to forge a confirmation. This misinterpretation involves negligence on the auditors because they should be aware of this red flag. It is passing possible for the CFO to forge a confirmation rough the accounts receivable. Since this account receivable is significantly large on the balance sheet, the CFO might have the intent to mislead the auditors round the correct amount of such large transaction. In this case, the mistake is characterized as negligence because the auditors fail to perform the confirmation force with...If you want to get a full essay, order it on our website: Ordercustompaper.com
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