Walmart purchased large quantities of goods from your client company. You know that Walmart often does...

Walmart purchased large quantities of goods from your client company. You know that Walmart often does not respond to confirmation requests, but you still sent Walmart a positive confirmation request, in your client's name. Why did you do that? What would you possibly do if Walmart never responded?

Expert Solution

Despite knowing that Walmart does not respond to confirmation requests I have still sent Walmart a positive confirmation request in my client’s name because this is my responsibility as an auditor. Positive confirmation is an auditing inquiry that requires the customer (in this case Walmart) to respond so that you can confirm the accuracy of an item. I sent the positive confirmation request in the hope that Walmart will respond and that I will therefore be able to confirm the accuracy of an item. As my client is supplying large quantities of goods to Walmart then the conformation will related to items like amount due to my client by Walmart, quantity of inventory bought by Walmart etc.

In case Walmart never responded then I will have to make use of the accounting reports of my client and determine the accuracy of data presented by them. I will trace the receivable report to general ledger, calculate the receivable total, investigate the reconciling items, test the invoices listed in the receivable report, match invoices to shipping logs, and then confirm the accounts receivables. I will also do a trend analysis with regards to receivables from Walmart to determine it there are any unusual trends or aberrations or anomalies.

ekkarill92 answered 2 years ago

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