In connection with the examination of financial statements by an independent auditor,the client suggests that members of the internal audit staff be utilized to minimize audit costs.Which of the following tasks could most appropriately be delegated to the internal audit staff?
A) Selection of accounts receivable for confirmation, based upon the internal auditor's judgment as to how many accounts and which accounts will provide sufficient coverage.
B) Preparation of schedules for negative accounts receivable responses.
C) Evaluation of the internal control for accounts receivable and sales.
D) Determination of the adequacy of the allowance for doubtful accounts.

Question

Quizplus · Accepted Answer

The preparation of schedules for negative accounts receivable responses is a task that can be delegated to the internal audit staff. This involves identifying accounts that are expected to have zero or negative balances and preparing schedules for them to be confirmed by the auditor. The other tasks require professional judgment and knowledge that may not be within the scope of the internal audit staff's expertise. For example, the evaluation of internal controls for accounts receivable and sales requires an understanding of the entity's operating environment, while the determination of the adequacy of the allowance for doubtful accounts requires knowledge of accounting standards and estimation techniques. Therefore, these tasks should be performed by the independent auditor.

In Connection with the Examination of Financial Statements by an Independent