Read the case and answer the questions that follow. Audit standards require analytical procedures at two stages during t

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Read the case and answer the questions that follow.
Audit standards require analytical procedures at two stages
during the audit: at the risk assessment (planning) phase and again
at the end of the audit. They are optionally used as a substantive
procedure during the course of an audit.
CONCEPT REVIEW:
Often times it does not seem to be productive or effective for
auditors to send accounts receivable confirmations, yet the
standards require it. It is important that auditors understand how
to maximize effectiveness and efficiency in this required audit
procedure.
Read the case. Then answer the questions based on
it.
BACKGROUND:
Audit standards indicate that there is a presumption that
auditors will confirm accounts receivable unless the balance is
immaterial, confirmations are deemed ineffective, or the auditors'
assessment of risk is low and other procedures will achieve the
same objective. However, these instances are considered few and far
between and current trends in auditing indicate that there is an
expectation that accounts receivable will be confirmed. Auditors
may stratify the population, use haphazard or judgmental sampling,
and send positive or negative requests.
Jenner & Jenner CPAs are the auditors for the Leno Company.
In reviewing the accounts receivable aging, the auditors learn that
there is a high number of accounts with balances, there are some
very large and very small balances, and many customers' balances
consist of multiple invoices.
1. Should Jenner & Jenner CPAs send accounts receivable
confirmations?
2. How should the auditors mitigate the risk associated with
both very large and very small balances?
3. Because so many customer balances consist of multiple
invoices, what could the auditors do to eliminate unnecessary
reconciliation?
4. What procedures can be performed on customers who do not
respond?