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Question 5 (This is review question 13-2 from page 425, which had been assigned as homework.)...

Question 5

(This is review question 13-2 from page 425, which had been assigned as homework.)

Explain the importance of proper credit approval for sales. What effect do adequate controls in the credit function have on the auditor's evidence accumulation?

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Answer #1

A satisfactory credit endorsement for deals helps with limiting the measure of awful obligations and the endeavors made for gathering the receivables by assessing every deal for its potential for accumulation. Appropriate controls in the credit division help inspector to put more dependence on the gauge made by customer for uncollectible records. Without such controls. the reviewer is required to play out his own checks for the clients to offer beyond any doubt that leeway made for uncollectible records are sensible

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