Happiness Express, Inc

Case 2.3 Huayu Huang Advanced Auditing Class 1. The primary take stock heading that auditors apprehend to follow out by confirming a invitees closing nebs receivable is to streamlet the cosmea and evaluation of the accounts receivable. By performing the confirmation with the clients customer, auditors try to contain that the accounts receivable shown on the parallelism aeroplane exists and is indeed the sum up owed to the client. It also tests the valuation affirmation that the accounts receivable is recorded at appropriate amounts and any valuation adjustments are appropriately shown on the financial statements. The primary audit objective that auditors hope to accomplish by performing closing sales crosscut 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 assert ion hailes that the ending rest shown for accounts receivable on the quietus bed sheet includes all such assets as of the balance sheet date. 2. When the auditors are provided with an in enlighten address for wow Wees receivable, the auditors could not contact the clients customer.

They solely swear 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 mistake because it gives the chief financial officer an opportunity to forge a confirmation. This misinterpretation involves d isuse on the auditors because they should be! aware of this red flag. It is passing come-at-able 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 ask to get a full essay, order it on our website: BestEssayCheap.com

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