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Unformatted text preview: change in credit terms, return policy or collection policy (if bad debts is a sales contra account) awarded a government contract with high margins large volume of sales at year end stuffing distribution channels economic trend, loss of competitors one large related party sale close to year end What should the auditor do? physically examine inventory assure a good inventory cutoff inquire as to the reasons for the change;perform analytical review procedures by product line; confirm receivables Analysis and Inquiry Analytical procedures (either planning, substantive or review) frequently raise questions that lead to inquiry of client personnel It is especially important that you NOT suggest answers as part of the question Have the client to explain the discrepancies you found in your analytical procedures Silence is golden applies here, dont fill in the silence with a suggested reason....
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This note was uploaded on 10/05/2011 for the course ACG 5637 taught by Professor Monikacaushoulli during the Fall '08 term at University of Florida.
- Fall '08