ch 11 outline - Outlines Chapter 11 -1 Chapter 11 Accounts...

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Outlines Chapter 11 - 1 Chapter 11 Accounts Receivables 1. Confirmations Types—Positive, Negative When to Use: Positives 1. Large accounts 2. Reason to believe there is a large number of errors. Negatives 1. Combined assessed level of inherent and control risk is low 2. Large number of small balances involved 3. No reason to believe recipients of requests are unlikely to give them consideration Non-Replies Positives -Try second requests then, alternate procedures: 1. Examine subsequent cash receipt 2. Examine sales invoices 3. Examine shipping documents 4. Examine correspondence 5. Telephone Negatives —In theory, at least, assume correct Other 1. Reconcile differences between amount on confirmation and amount debtor says s/he owes 2. As indicated under cash, confirmations primarily address the existence assertion. To a much lesser extent they address valuation 3. Confirmation of receivables is a generally accepted auditing procedure. The CPA who does not confirm has the burden of justifying—this justification should be done in working papers, not in audit report.
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This note was uploaded on 09/08/2010 for the course BUS 129A at San Jose State University .

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ch 11 outline - Outlines Chapter 11 -1 Chapter 11 Accounts...

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