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Question - Sharky Simmons, CPA, is auditing the financial statements of Boston Company. Sharky is a first-year auditor and has been given the task of overseeing the confirmation of accounts receivable as a test of Boston Company's overall accounts receivable balance.
Required -
-Under what circumstances could Sharkey justify NOT confirming Boston's accounts receivable?
-In designing confirmation requests, what factors about the type of confirmation form/letter, the client, or the client's customers are likely to affect Sharky's assessment of the reliability of the confirmations that Sharky sends?
-What alternative procedures could Sharky perform if replies to positive confirmation requests are not received?
-What procedures should Sharky perform to gain sufficient evidence regarding Boston's allowance for uncollectible accounts?
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