Reference no: EM131794949

Learning Solutions Ltd is in the business of providing educational technological products to learning institutions and businesses worldwide and is listed on the Hong Kong Stock Exchange. However, recently, accounting scandals and fraud allegations have sent the company’s stock price crashing and forced the firm to seek bankruptcy prot ection. The following selected information is related to Learning Solutions Ltd’s sales and accounts receivable: 1 Consolidated revenue increased 184% from the 2015 fiscal year to the 2016 fiscal year. 2 Revenue in South Korea, which has a reputation of being a diffic ult market for foreign companies to enter, increased from $100,000 in the first quarter of 2015 to approximately $50 million in the fir st quarter of 2016. 3 In the second quarter of 2016, sales grew by 104% but accounts receivable grew by 128%. 4 Average days outstanding increased from 138 days in 2015 to 160 days for the six-month period ended in 30 June 2016. Required a Based on the above information, which assertion(s) for sales should the auditor be most concerned with? Discuss why. Assignment File 25 b Based on the above information, which assertion(s) for accounts receivable should the auditor be most concerned with? Discuss why. c What audit evidence should the auditor gather to verify the assertion(s) for sales and accounts receivable? Be specific as to how each type of evidence relates to the assertions you mentioned in parts (a) and (b) of this question. d Discuss five factors auditors should consider in planning the mix of audit procedures required (i.e. tests of controls and substantive procedures) in order to gather sufficient and appropriate audit evidence.