Current Attempt in Progress An auditor is testing accounts receivable for a client that has 1,000 customers with customer balances that range from $150 to $185,000. The auditor subdivided the receivables into three groups: group 1 has all customers with receivable balances between $185,000 and $100,000, group 2 has all customers with receivable balances between $100,000 and $25,000, and group 3 has all customers with receivable balances less than $25,000. The auditor then randomly selects customers out of each group. This is known as: O random selection. O haphazard selection. O block selection. O stratified sampling.

PROBLEM 2 You are revisiting the audit working paper presented to you by your audit staff in line with his audit procedures done in auditing T-ara Corporation’s accounts receivable. The following were lifted from the said working papers:   Audit notes: T-ara Corporation’s accounts receivable subsidiary ledger had the following details: Customers Invoice Date Invoice Amount Balance Park Ji-yeon Inc. 12/06/22 127,000     10/29/22 84,000   211,000         Hyomin Company 12/30/22 42,000     09/27/22 30,000     08/20/22 53,520   125,520         Hahn Eunjung Inc. 12/30/22 40,000     12/08/22 80,000     11/25/22 63,600   183,600         Park So-yeon Company 11/17/22 138,840     10/09/22 132,000     08/20/22 74,400   345,240         Jeon Boram Corporation 12/10/22 250,000   250,000         Qri Incorporated 09/12/22 104,400   104,400 Total     1,219,760   The…

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Q. A staff internal auditor was assigned to audit one of the company’s wholesale distribution locations. The staff auditor returned to the office after a week and said that everything was fine.   The senior auditor reviewed the staff auditor’s working papers and noted that there was a year-end adjustment in excess of US $100,000—a debit to sales and a credit to accounts receivable. “To adjust the general ledger accounts receivable account to the accounts receivable subsidiary ledger” is how the description read. The senior asked the staff auditor how an error that big could have happened. He told her the location manager said there had been some problems installing the accounting system at the new store. Initially, the senior auditor thought the adjustment was proper since the general ledger balance was now in agreement with the subsidiary ledger. However, a short time later she was reviewing the analytical procedures performed by the staff auditor and noted that the gross margin…