AccountsReceivable
While I think of it, you need to prepare a memo (C-2-1) addressing the following issues:
1. Describe the two forms of accounts receivable confirmation requests that you used and indicate the factors that you considered in determining which type to use.
2. What "alternative procedures" are you going to use to verify the existence of these accounts and the gross value of the receivables if the customers who receive positive confirmations never reply, even to a second request? ( 2007 Audit of Accounts Receivable)
Neutralizer
Accounts Receivable Aged Trial Balance shows their payment of $3,053,144.23; however, there shows an amount of $1,388 which Neutralizer overpaid. That amount should be refunded directly to Neutralizer.
Mall-Warts
Although Mall-Warts filed for bankruptcy, they were able to make a payment of
$5,765,081.85 within 30 days of ordering merchandise. To determine whether Mall-Warts received an incorrect shipment of shoes, inventories should be researched within Apollo to ensure that there was a mistake in shipping which needs to be corrected.
Run for Your Life Shoes No discrepancies between company financial statement information.
Sassy Shoes The accounts Receivable Aged Trial Balance does not show a payment on the 10th; in fact Sassy Shoes hasn’t made a payment in three months.
International Soccer Federation No discrepancies between either company’s financial statements.
1. Describe the two forms of accounts receivable confirmation requests that you used and indicate the factors that you considered in determining which type to use.
2. What "alternative procedures" are you going to use to verify the existence of these accounts and the gross value of the receivables if the customers who receive positive confirmations never reply, even to a second request? ( 2007 Audit of Accounts Receivable)
Neutralizer
Accounts Receivable Aged Trial Balance shows their payment of $3,053,144.23; however, there shows an amount of $1,388 which Neutralizer overpaid. That amount should be refunded directly to Neutralizer.
Mall-Warts
Although Mall-Warts filed for bankruptcy, they were able to make a payment of
$5,765,081.85 within 30 days of ordering merchandise. To determine whether Mall-Warts received an incorrect shipment of shoes, inventories should be researched within Apollo to ensure that there was a mistake in shipping which needs to be corrected.
Run for Your Life Shoes No discrepancies between company financial statement information.
Sassy Shoes The accounts Receivable Aged Trial Balance does not show a payment on the 10th; in fact Sassy Shoes hasn’t made a payment in three months.
International Soccer Federation No discrepancies between either company’s financial statements.