Get answer 77

When you examine customers’ responses on the returned confirmations, you will see that several customers have disputed the outstanding AR balance as of the fiscal end date. As you see in EXHIBIT 7.13 in the textbook (page 296), auditors must take follow-up actions to investigate whether these discrepancies indicate a misstatement. Describe an appropriate follow-up action for each case of confirmations (Explain your answer for full credit). Note that not all discrepancies in the confirmation lead to a conclusion that the A/R balance is misstated. You may even conclude that the customer is mistaken and there is not further action to be taken.