Customers having substantial year-end past due balances fail to reply after second request confirmation forms have been mailed directly to them. Which of the following is the most appropriate audit procedure?
A)Examine shipping documents.
B)Review collections during the year being examined.
C)Intensify the study of the entity's system of internal control with respect to receivables.
D)Increase the balance in the allowance for uncollectible accounts.

Question

Quizplus · Accepted Answer

Examining shipping documents is the most appropriate audit procedure in this scenario because it directly verifies whether the goods were actually shipped to the customers, which supports the existence of the receivables.

Customers Having Substantial Year-End Past Due Balances Fail to Reply