thanks in advance.
You are the audit supervisor of Hasel Co, which is a manufacturing company. You are currently planning the audit of trade receivables for the year ended 31 December 20x8. At 31 December, Hasel’s trade receivables balance was $6.500.000. Hasel Co has more than 600 customers, including nine customers owing more than $250.000 each. Tests of control revealed weaknesses in Hasel’s internal control over sales and trade receivables. In prior year audits, confirmations revealed misstatements in several customers’ account balances.
The auditor should compare sales order/ goods despatch notes/ sales invoices/ the sales ledger shortly before/ after the year end with sales order/ goods despatch notes/ sales invoices/ the sales ledger
The confirmation request should be negative/ positive because Hasel Co’s customers are expected to ignore the confirmation request/ misstatements were revealed in the prior year/ the risk of material misstatement is high/ there is large number of small balance account
Hasel Company – Account receivable + Debtors Confirmation + Invoice processing
Case Position – As on 31st Dec 2018 , hasel trade receivable balance was $ 65,00,000. At present Hasel having 600+ customer and out this major 9 customer havening balance > 250000 each so total balance would be $22,50,000 , so it is covered almost 35% of total OS . Unfortunately noticed that weakness in Internal control system in relates to receivable , balance confirmation etc. Alos identified material misstatement in account receivable balances . Auditor has to do following step while doing audit of account receivable :
After sending confirmations to Hasel Co customer , Auditor received a reply from a customer which shows that the outstanding balance is not agreed – In this situation , Auditor has to look into following :
One of Hasel Co’s customers responds that it cannot confirm the amount owed due to the form in which it keeps its accounting records. Which TWO of the following audit procedured are appropriate to follow up on this response? – In this case auditor should go with following
d) Inspect supporting documentation such as Invoices and dispatch notes
The managing director of Hasel Co has refused permission to send a direct confirmation request to a major customer selected for that procedure, on the grounds that the customer is ‘a close friend who may take offence at such a request’. What is your next course of action? Auditor should highlight that
Point number b) that his refusal constitutes a restriction to scope which lead to a qualification of the audit report .
c) To carry out the confirmation procedures as planned since the auditor’s responsibility is to the shareholders and not the directors
Balance confirmation auditing procedure help Auditor to check completeness of account receivable balances mainly high value amount .Audit confirmation letter is a specific type of inquiry. It is the process of obtaining a representation of information or of an existing condition directly from a third party. The reliability of evidence obtained through confirmation is directly affected by following factor such as :
ISA 330 , 240 and 500 indicates that external confirmation procedures may assist the auditor to obtain audit evidence with high level of reliability . Auditor needs to find out any significant material misstatement, any fraud or error etc.
thanks in advance. You are the audit supervisor of Hasel Co, which is a manufacturing company....
Case Study question in Auditing You are the audit supervisor of Hasel Co, which is a manufacturing company. You are currently planning the audit of trade receivables for the year ended 31 December 20x8. At 31 December, Hasel’s trade receivables balance was $6.500.000. Hasel Co has more than 600 customers, including nine customers owing more than $250.000 each. Tests of control revealed weaknesses in Hasel’s internal control over sales and trade receivables. In prior year audits, confirmations revealed misstatements in...
06-10 You are the audit supervisor of Hasel Co, which is a manufacturing company. You are currently planning the audit of trade receivables for the year ended 31 December 2008. At 31 December, Hasel's trade receivables balance was $6.500.000. Hasel Co has more than 600 customers, including nine customers owing more than $250.000 each. Tests of control revealed weaknesses in Hasel's internal control over sales and trade receivables. In prior year audits, confirmations revealed misstatements in several customers' account balances....
PLEASE ANSWER , I SAW THIS QUESTIONS ANSWERS IN ANOTHER EXPERT ANSWERS POST BUT I DIDNT GET IT SO PLEASE HELP ME . Q6-10 You are the audit supervisor of Hasel Co, which is a manufacturing company. You are currently planning the audit of trade receivables for the year ended 31 December 20x8. At 31 December, Hasel’s trade receivables balance was $6.500.000. Hasel Co has more than 600 customers, including nine customers owing more than $250.000 each. Tests of control...
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