As part of your fi rst audit of the fi nancial statements of Marina del Rey Inc. you have decided
to confi rm some of the accounts payable. You are now in the process of selecting the individual
companies to whom you will send accounts payable confi rmation requests. Among the
accounts payable you are considering are the following:
Company Amount Payableat Year-End Total Purchases fromVendor during Year
Dayco Inc. $ $1980000
Gearbox Inc. 22650 46100
Landon Co. 65000 75000
Western Supply 190000 2123000
a. Which two of the above four accounts payable would you select as the most important to
confi rm? Explain your choice in terms of the audit objectives in sending accounts payable
confi rmation requests.
b. Assume that you are selecting accounts receivable to be confi rmed. Assume also that the
four companies listed above are customers of your client rather than suppliers and that the
dollar amounts are accounts receivable balances and total sales for the year. Which two
companies would you select as the most important to confi rm? Explain your choice.
