HW CH 16 and 17 - WK09.docx - CHAPTER 16 PROBLEMS 16-24(Objectives 16-1 16-2 16-3 The following are common tests of details of balances or substantive

HW CH 16 and 17 - WK09.docx - CHAPTER 16 PROBLEMS...

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CHAPTER 16 PROBLEMS16-24 (Objectives 16-1, 16-2, 16-3) The following are common tests of details of balances or substantive analytical procedures for the audit of accounts receivable:1.Select 20 customer accounts from the accounts receivable master file and trace to the aged accounts receivable listing to verify name and amount.Completeness; 4th2.Select 20 customer accounts from the aged accounts receivable listing and trace to the accounts receivable master file for name, amount, and aging categories.Detail Tie-In; 3rd3.Prepare a bar chart showing amounts and percentages of accounts receivable in each aging category for the current and prior year and evaluate trends.Detail Tie-In; 2nd4.Obtain a list of aged accounts receivable, foot and cross-foot the list using audit software, and trace the total to the general ledger.Detail Tie-In; 1st5.Compute accounts receivable turnover for the current year and compare to the prior year and to the industry average.Existence Realizable Value; 7th6.Perform alternative procedures on accounts not responding to second requests by examining subsequent cash receipts documentation and shipping reports or sales invoices.Existence Accuracy; 5th7.Request 50 positive confirmations of accounts receivable.Existence Accuracy; 6thRequireda.For each audit procedure, identify the balance-related audit objective or objectives it partially or fully satisfies.b.In which order would the auditor perform the seven procedures? Briefly justify your answer.16-26 (Objectives 16-2, 16-3) With advances in technology, an increasing number of data analysis techniques are being used on audit engagements to increase both efficiency and effectiveness. In an article titled “Introduction to Data Analysis for Auditors and Accountants,” published in the CPA Journal(February 16, 2017), authors Kogan, Vasarhelyi, and Appelbaum describe how technology-driven data analysis can be used in all stages of the audit. Read the article on data analysis (available at ) to answer the following questions: Requireda.The authors discuss the emphasis on “audit by exception” when using data analysis. What does “audit by exception” mean and how does it differ from a traditional audit approach using statistical sampling? How does an auditor identify the exceptions?b.The authors note that data visualization can be used to conduct exploratory data analysis. Describe how data visualization could be used in the audit of the sales and collection cycle.c.Choose one of the methods identified by the authors as emerging approaches, for example blockchain or deep learning, and discuss how an auditor might test one of the accounts receivable balance-related audit objectives using this method.

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