As a Member of the Audit Staff of Redman

As a member of the audit staff of Redman & Co.,CPAs,you have been assigned to the audit of a new client,Auburn Corporation.Upon arriving at the client's offices,the controller provides you with copies of the company's annual financial statements.You quickly observe that the balance of accounts receivable has increased materially over the amount reported on the prior year's balance sheet.Your inquiry of the controller produces the following response:
"This year we have included several other items with our trade receivables.All of these items represent receivables and include:
(a)Advances made to officers and employees,
(b)Advances to our subsidiary company,and
(c)A refund from the Internal Revenue Service resulting from the favorable resolution of a disputed tax matter.
I have included a description of the tax item in the note to the financial statements.Since the other two items represent internal matters,I saw no reason to disclose them or present them as separate items on the balance sheet."
Do you concur with the controller's treatment of these items? Explain.