Final answer:
Reviewing credit ratings for delinquent accounts receivable is mostly done to support valuation and allocation assertions. It helps auditors assess the likelihood of collection and the need for adjustments to the accounts. Borrowers can reassure banks by showing a reliable payment history, providing collateral, or highlighting their financial resources.
Step-by-step explanation:
An auditor's purpose in reviewing credit ratings of customers with delinquent accounts receivable is most likely to obtain evidence concerning management's assertions about valuation and allocation. This is because an up-to-date assessment of a customer's creditworthiness can affect the valuation of accounts receivable on the balance sheet. If a customer with a delinquent account has a poor credit rating, this might indicate a higher risk of non-collection, and thus, the receivable may require an adjustment such as a write-down or an allowance for doubtful accounts. This provides evidence for the proper valuation and allocation of receivables on the financial statements.
Regarding the second part of the student's inquiry, ways a borrower might reassure a bank about their loan repayment capability include providing a history of timely payments, offering collateral, presenting a strong business plan (if a business loan), or showing evidence of savings and other investments. By presenting a solid financial background or securing the loan, borrowers might mitigate the bank's concern about potential credit risks.