Assume you are working on a 12/31 year-end audit. It is now March 31 st and the

Assume you are working on a 12/31 year-end audit. It is now March 31 st and the12/31 accounts receivable aging shows a large receivable that was outstanding on12/31 for 120 days. Further, the entity’s receivables are typically collected in lessthan 45 days. You anticipate that the entity’s allowance for doubtful account shouldbe increased and inform the entity about your disposition. Management disagrees. Isthere an alternative substantive procedure that you could perform that would provideconvincing evidence that this balance is collectible? If so, explain.2. You have been placed in charge of determining the sample size for an audit ofaccounts receivable. Your superior would like a confidence level of 99%. How doesthis affect your determination of sample size? What can you infer about the level ofrisk of incorrect acceptance that your superior is willing to accept?3.You have been placed in charge of determining the sample size for an audit ofaccounts receivable. Your superior would like a confidence level of 99%. How doesthis affect your determination of sample size? What can you infer about the level ofrisk of incorrect acceptance that your superior is willing to accept?4.For a particular audit, the sample size for testing controls over the revenue cycle isrelatively large. What can you infer about the desired confidence level, the tolerabledeviation rate, and the expected population deviation rate?Describe the limitations of internal control. Why do limitations on internal controlexist?5.6.Why might an auditor decide to test controls at an interim date?7.You are performing an audit on North South Natural Gas (NSNG). Alana, an NSNGemployee, has responsibility for reconciling bank statements with the entity’s cashaccounts. You determine, however, that Alana has never been taught how toreconcile statements. In effect, the statements have not been properly reconciled fortwo years. How would you judge the significance of this control deficiency? Howwould you classify this deficiency?8.Trumpeter Corporation is a small publicly traded company that specializes in therestoration and sale of fine musical instruments. The audit committee is made up of aCEO from a technology company, a college accounting professor, and a localmarketing executive. All are sufficiently independent from management. Members ofthe audit committee meet three times a year. Each time they meet, a differentmember, who chooses the topics to discuss, leads the meeting. The audit committeethen sends the minutes of its meetings to the entity’s CFO. Solely from thisinformation, what are your conclusions about this audit committee’s role within thecontrol environment?"Technology has steadily reduced the number of situations in which audit sampling isnecessary and in the future technology will probably eliminate the need for auditorsto rely on sampling." Defend or refute the preceding statement.9.10. Information Nation has two hundred locations spread across the fifty states. Twenty ofthe locations are considered to be individually important, but fifty of the locations arenot important even when aggregated from the others. Five locations deal with foreignexchange trading. These locations are not considered important, but they areimportant when aggregated with the other locations. As an auditor, discuss theconsiderations involved in testing multiple locations and group the locationsaccordingly (provide how many locations are included in each group). Include thetreatment that each group should receive from the auditor.11. In terms of an audit, define substantive strategy and reliance strategy. Include in yourdefinition how the different strategies relate to internal control. Which strategy wouldbest relate to a lower control risk?