Imagine that you were auditing accounts receivable balances to confirm sales and found significant discrepancies between the recorded account balances and returned confirmations from customers. Recommend an alternative approach to confirming sales revenue. Provide rationale for your recommendation.
Using the case as a reference and from the e-Activity, discuss the improper recognition treatment you researched, and make a recommendation regarding the type of analytical procedure that should have detected the improper accounting transactions. Propose the internal control activities or audit plan that might have detected the improper transactions. Be specific with your recommendation.
150 to 200 words
Upon doing an audit and comparing the sales records and the returned confirmations from the customers, there seems to be quite an anomaly in the balances. There apparently seems to be a leak point for some of the revenue generated.
However, it is best to try and find a more foolproof method of confirming the sales revenues. This is in order to make the system more efficient and harder to draw out the gains undetected. Best way to confirm all the record from the sales is to look and focus a less looked at documents such as receipt book….