Audit response

Try to verify the amount in other ways. For example, see if the amount is paid before the audit report is signed.

Look at the orders and despatch notes that gave rise to the receivable.

Telephone them/Google to see if they exist.

Ensure they have not gone into liquidation.

An audit response could be to ask for the debt to be written off is there seems no chance that it will be paid or no way that the amount can be verified..

In the exam you will be faced with questions that will require you to use your imagination – as here.

No more help will be provided on this question. You will presumably fbe able to look at a model answer at some time, perhaps one provided by your tutor.