Happiness Express, Inc

Case 2.3 Huayu Huang Advanced Auditing Class 1. The primary canvass accusatory that auditors apprehend to follow out by confirming a invitees closing casts receivable is to streamlet the earth and military rating of the accounts receivable. By performing the confirmation with the clients customer, auditors try to contain that the accounts receivable shown on the parallelism piece of paper exists and is indeed the sum up owed to the client. It also tests the valuation presumption that the accounts receivable is recorded at appropriate amounts and any valuation adjustments are rightly shown on the financial statements. The primary audit objective that auditors hope to accomplish by performing year-end sales shortcut tests is to test the cutoff and completeness assertions. To test the cutoff assertion, auditors have to ensure that evidential transactions occurring near year-end are recorded in the financial statements in the proper period. The completeness asse rtion hailes that the ending rest shown for accounts receivable on the repose tacking includes all such assets as of the balance sheet date. 2. When the auditors are provided with an in slump address for rioting Wees receivable, the auditors could not contact the clients customer.

They solely cuss on the former chief financial officers offer to contact the appropriate individual at Wow Wee to ensure that the confirmation was returned to Coopers. However, this is a voluminous misidentify because it gives the chief financial officer an opportunity to forge a confirmation. This misinterpretation involves inattent ion on the auditors because they should be a! ware of this red flag. It is passing viable for the CFO to forge a confirmation rough the accounts receivable. Since this account receivable is significantly large on the balance sheet, the CFO might have the intent to mislead the auditors round the correct amount of such large transaction. In this case, the mistake is characterized as negligence because the auditors fail to perform the confirmation force with...If you unavoidableness to get a full essay, order it on our website: OrderCustomPaper.com

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