Question

The auditor's primary concern in performing audit procedures of the write-off of uncollectible accounts relates to the risk that the client writes off customer accounts that have already been collected. The primary control for preventing this fraud is

A) examining authorized credit memos.
B) examining the uncollectible account authorization form.
C) examining debit memos.
D) examining the vouchers payable register.

Answer 1

The primary control for preventing the fraud of writing off collected customer accounts is examining the uncollectible account authorization form during audit procedures.

Step-by-step explanation:

The student's question relates to the auditor's primary concern when performing audit procedures for the write-off of uncollectible accounts. The primary control for preventing the potential fraud of writing off customer accounts that have already been collected is B) examining the uncollectible account authorization form. This form is usually part of the internal control process that requires management authorization for writing off an account, which helps ensure that only valid, truly uncollectible accounts are written off. By reviewing this form, the auditor can verify that each write-off has been properly authorized and is not a fraudulent attempt to conceal theft or embezzlement.