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Tom Jones, an auditor is auditing the financial statements of a manufacturing company with a significant amount of trade receivables. Jones is satisfied that the accounts are summarized and classified appropriately and are valued in accordance with generally accepted accounting principles, Jones intends to use the accounts receivable confirmation requests to satisfy the third fieldwork standard on trade accounts by charge to.
Question 1: Identify and describe the two forms of request for receivables confirmation and indicate the factors that Jones should consider when determining when to use each.
Question 2: Assume that Jones has received a satisfactory response to the confirmation requests. Describe how Jones might assess the collection possibilities of trade accounts receivable.
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