Which of the following audit procedures should be carried out to confirm the balance
owing to Carnation Co? The difference in the balance is due to an invoice which is under dispute due to faulty goods which
were returned by client to the supplier on 29 March 20X5.
1-Review post-year-end credit notes for evidence of acceptance of return
2-Inspect pre-year-end goods returned note in respect of the items sent back to the
supplier
3-Inspect post-year-end bank ledger account for evidence that the amount has been
settled
i chose the answer as all 3 options but kaplan says answer is only 1 nd 2 statements. y cant statement 3 also be correct?
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kaplan qtn 108
2mo ago#1Short answer - would YOU pay for faulty goods that you had returned to a supplier?
The point is that according to the audit client's records, there is no liability. To confirm the balance is to confirm that there is no liability because it doesn't exist (not that there is no liability because it's been paid - do you see the distinction?)
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