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August 25, 2017 at 7:12 am
While sending third party confirmations – they are send on a “Client letter head” or they are send a on “Auditors Letter head”
August 25, 2017 at 12:11 pm
Client letterhead. This gives the client’s customers ‘permission’ to confirm amounts to the auditor. Replies should go directly to the auditor.
August 25, 2017 at 4:34 pm
Even my understanding was the same but I came across one question of BPP
Q – The audit team has started to perform audit fieldwork on Wilbur Co.
In order to gain assurance over the company’s bank balance, you have asked Julie(auditor) to arrange for a bank confirmation letter to be sent to Wilbur Co’s bank.
Which of the following summarises the steps to take in preparing the bank
A Written on the audit firm’s headed paper; information requested to be sent directly to the auditor
B Written on the client’s headed paper; information requested to be sent directly to the auditor
C Written on the audit firm’s headed paper; information requested to be sent directly to the client
D Written on the client’s headed paper; information requested to be sent directly to the client
The answer for the same as per BPP is A.
Can you please help me further. Or is it like when we raise bank confirmations – we use Auditor’s letterhead and in other cases like receivables and payables we will us Client’s letterhead.
August 25, 2017 at 8:31 pm
Sorry, for some reaaon I read your original query as relating to a receivables confirmation.
Bank confirmations are differemt because the client gives standing permission for its bank to reply to auditor’s queries. Therefore, letters to the bank for balance confirmation can be on auditor’s note paper.
August 24, 2016 at 11:15 pm
Why should nil balance on the AR ledger be included in the circularisation to customer?
August 24, 2016 at 11:26 pm
Just suddenly thought to myself: is it to confirm that no receivable balance exist?(existence assertion) *__*
August 26, 2017 at 8:13 am
August 25, 2016 at 6:28 am
To test completeness. Perhaps it shouldn’t be 0.
August 26, 2016 at 11:43 pm
Thank you! Big fan of the lecture by the way.
hassan rana says
June 5, 2016 at 5:07 am
Well Sir. If we are asked to give substantive procedures for revenue.. So can we write prodeures of sales?
Well Sir. If we are asked to give substantive procedures for revenue.. So can we 2rite prodeures sales?
January 9, 2016 at 9:00 pm
In the chapter notes, it says that a Negative Circularisation is when you ask for a reply only if the balance is out of agreement. What agreement? What does ‘out of agreement’ mean in this context?
January 10, 2016 at 1:15 pm
The circularisation letter would ask a customer to confirm that they owe, say $1,200. If the customer thinks they only owe, say, $1,000, then the balances do not agree. A negative circularisation hopes that in those circumstances the customer will reply stating that so that the difference can be investigated.
January 6, 2016 at 5:47 am
i can’t download this video. please Help me.
January 6, 2016 at 2:38 pm
No videos can be downloaded.
September 3, 2015 at 1:16 pm
open tuition,thank you for this lesson
August 12, 2015 at 6:21 am
excellent lecture. one question about Correspondence:
does the auditor write to the customers about balances in addition to the circularization? or does the auditor simply looks at the correspondence that has already happened between the client and its customers?
August 12, 2015 at 8:46 am
Auditor does not normally write – except to follow up circularisation letters that haven’t had replies.
August 12, 2015 at 9:41 am
cool!! .. another question but this is more related to the technique of answering the question rather than the answer it self:
suppose u r given 2 liner scenario about a company and the question is as follows (10 marks):
Explain the audit procedures that should be carried out on the receivables
balance at Delphic, explaining the reason for each procedure.
1. how many procedures shd the answer have?
2. how important is it that procedures pertain to different assertions? for example, we know that Receivables key assertions are existence and valuation. what if, in the heat of the moment in the exam, you can only remember the procedures related to existence. how wd the examiner mark such a question?
thanks in advance
May 15, 2015 at 4:15 pm
Thank you Open tuition
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