Describe alternative procedures that could be used

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Question - Tracy Sangster is employed by an accounting firm and has recently been assigned to the audit of Enviro Ltd., a publicly listed company. This is a new audit client for Tracy's firm, as Enviro Ltd. replaced its auditors after seven years with a local audit firm. Management at Enviro Ltd. has indicated that it will NOT allow audit confirmations to be used to determine possible misstatement in the accounts receivable balance. Management stated that the previous auditor had NO issue with this limitation. Accounts receivable is material to Enviro Ltd.'s financial statements.

Required -

a) Describe alternative procedures that could be used, instead of confirmations, to appropriately test the accounts receivable balance.

b) Identify the implication to the independent auditor's report if sufficient evidence is provided by the alternative procedures.

c) Identify the implication to the independent auditor's report if insufficient evidence is obtained by the alternative procedures.

Reference no: EM133020907

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