Working paper problem
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Working paper problem

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Working paper problem Working paper problem Document Transcript

  • The following Accounts receivable Confirmation Statistics working paper (indexed B-3) was - prepared by an audit assistant during the calendar year 19X1 audit of Lewis County Water Co., Inc., a continuing audit client. The engagement supervisor is reviewing the working papers. Lewis County Water Co., Inc. ACCOUNTS RECEIVABLE — CONFIRMATION STATISTICS 12/31/91 Accounts Dollars Nu7nber Percent Amount Percent Confirmation Requests Positives 54 2.7% S 260.000 13.0% Negatives 140 7,0% 20,000 10.0% Total sent 194 9.7% 280,000 23 0% Accounts selected/client asked us not to confirm 6 0.3% Total s.~le. ted for testing 200 10.0% Total accounts receivable at 12/31/91. confirm date 2,000 100.0% $2,000,000 —* 100.0% RESULTS Replies received through 2/25/92 Positives — no exception 44 C 2.2% 180,000 9.0% Negatives — did not reply or replied “no e;cepuon 120 C 6.0% 16.000 Total confirmed without exceptior. 164 8.2% 196,000 Differences reported and resolved. no a4justment Positives 6 (p 3% 30.IJ~I 1.5% Negatives 12 6% 2.’l0i) .1% Total 18 ~ 9% 32,000 1.6% Differences found to be potential adjustments Positives 2 CX .1% 10,000 5% Negatives 8 CX 4% 2,000 1% total — 6% a4uuzweent, immaterial 10 5% 12,000 Accounts seie~ted:cli~nt asked us to .‘oiifirm 6 3% 1 .— Agreed to accounts receivable subsidiary ledger * Agreed to general ledger and lead schedule 0 Includes9ne related party transaction C Confirmed without exception, W/P B-4 CX ConfirzMd with exceptios.Uff 34 Overall conclusion The pe~ei~t9e1 adju.tmen# r~~$iUcz or E% ~ below materi~fity threshold; - therefore, tI~ ~~un?a I~~.ts&innc. is da~u~, ~aw~ RequIred: Describe the deficiencies in the working paper 9at the engagement supervisor should discover. Assume that the accounts were selected for Confirmation on the basis of ~ sample that was properly planned and documented on working paper B-2.