Reference no: EM133148284

Question - Your audit client has a December 31 year-end the total accounts receivable balance for your client is 10,000,000 the internal controls are considered to be fairly strong for the recording of accounts receivable. 50% of the accounts receivable balance is made up of 100 customers with large balances. the remaining 50% of the balance is made up of 2,500 customers with smaller balances. In this situation explain each of the following:

a. What type of confirmations are you going to use for testing accounts receivable, how many will you send out (what will be your sample size) and what will be the make-up of your sample? Explain why you came to the conclusion you did.

b. As of what date will you confirm the customers' AR balances (i.e, as of an interim date or as of the balance sheet date) explain why you came to the conclusion you did.

c. If you do not receive replies to the confirmations you sent out, what are you going to do to become comfortable with the customer's accounts receivable account balance? List all of the procedures you would perform.