You are a public accountant with the accounting firm of KPMG, Batchelor, and Leung. Your...
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You are a public accountant with the accounting firm of KPMG, Batchelor, and Leung. Your firm has been engaged to do the audit for ABC Manufacturing Company for several years. You are assigned to the audit team to work on ABC's audit for the year ended December 31, 20X5 The unaudited financial statements for ABC show accounts receivable at €427,300, net of the allowance for doubtful accounts. Approximately 15% of this amount is made up of large regular customers with receivable balances of €8,000 or more. The remainder of receivables consists of many customers with balances ranging from about €150 to €4,000.
Last year's accounts receivable, net of the allowance for doubtful accounts, was €385,500. The increase in accounts receivable from last year is consistent with an increase in sales revenue, although the percentage increase in sales is slightly less than the percentage increase in receivables. The method for calculating the allowance for doubtful accounts is consistent with the method that was used in prior years.
Required What are the specific audit objectives for the audit of accounts receivable at December 31, 20X5?
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