Reference no: EM132933016

Question - Substantive tests - Ali randomly selected 11 major accounts receivable accounts that are part of those tested during the tests of controls. Ahmed sent negative confirmation requests to clients. No confirmations were returned. Therefore, Ahmed concluded that the accounts receivables were not materially misstated.

Advertising expenses are material for ABC, although advertising expenses has been decreased by 55% of last year's balance as a result of cost cutting decision by management due to the financial effects of COVID. Nadia selected a large sample of transactions reported in the general ledger and agreed all amounts to supporting documents (e.g. invoice, approved purchase order, approved payment voucher). Nadia's testing focused on whether advertising expenses were overstated. No errors were found. Nadia concluded that the amount for advertising expenses was reasonable.

Overall Materiality is set at $150,000

Is this testing will enough to come to conclusion?