Requirement For each of the scenarios listed above, describe the most likely judgment trap that ultimately biased the auditor's decision making in the audit. Judgment trap 1. Chen Li worked on the audit of American Healthcare Associations (AHA), which operates hospitals and outpatient centers in Texas and Oklahoma. Chen was assigned responsibility to audit the allowance for patient receivables. For the past several years, AHA's accounting policy required that the recorded allowance for patient receivables be set to equal the total amount of receivables over 180 days past due. Prior audit testing of the allowance in previous years has found that the subsequent write-offs of patient receivables has closely approximated the amount included in the allowance. During the current year audit, Chen examined the amount recorded in the general ledger allowance account and reconciled that amount to the amount shown in AHA's consolidated aged trial balance in the 180 days past due amount. Given that the dollar amounts agreed, Chen concluded that the allowance was in accordance with AHA accounting policy and tairly stated. While media reports and other industry publications suggested that recent regulatory changes in healthcare insurance were affecting patients' ability to pay, Chen concluded that AHA's allowance was fairly stated given the amounts complied with AHA's policy Anchoring judgment trap Availability judgment trap Confirmation judgment trap Overconfidence judgment trap 2. Sherry Zipersky was assigned responsibility for evaluating the goodill impairment testing process at Georgia Metals, Inc. Because Georgia Metals growth strategy was based mostly on acquisitions, the company had experience in performing annual impairment tests of goodwill. The client provided Sherry extensive information along with detailed schedules that documented management's testing approaches, and it provided her support for key assumptions made by management. Sherry reviewed the schedules in detail and tested the key calculations. While Sherry's firm has a number of valuation specialists as part of its staff, Sherry decided not to request their assistance in making an independent assessment of goodwill impairment given that the client's documentation was extensive and it would take too much time to have the firm's valuation specialists complete an independent assessment. 3. Jason Jackson was responsible for auditing the occurrence of sales transactions in the audit of Asheville Manufacturing. As part of his testing, he reviewed the contracts signed between Asheville Manufacturing and its customers to determine that the transaction terms justified the recording of sales for the year under audit. In addition, he examined documentation related to the sales transactions, including the customers' purchase orders、shipping documents, and invoices generated by Asheville That evidence examined supported the correct recording of sales in the current year. However, Jason also noticed in the customer files copies of email exchanges between Asheville Manufacturing sales agents and the customers suggesting that some of the terms of the sales agreements could be waived at the customers' discretion. Jason decided to rely on the contracts and sales transactions documentation to conclude that the sales were properly stated, given that the other information was only included in emails. 4 Allison Garrett works on a number of audits of technology equipment manufacturers and has developed extensive knowledge and experience in the industry. On the recent audit engagement of financial statements for Zurich Technologies, Allison was responsible for auditing the valuation of inventories, including the reserve for obsolescence. Given her familiarity with the industry, Allison decided to conduct a quick substantive analytical procedure regarding the days in inventory and determined that the reserve was fairly stated, given it was in line with reserves established by some of her other clients. She determined that additional evidence was not necessary to obtain because of her experience with other clients Requirement For each of the scenarios listed above, describe the most likely judgment trap that ultimately biased the auditor's decision making in the audit. Judgment trap 1. Chen Li worked on the audit of American Healthcare Associations (AHA), which operates hospitals and outpatient centers in Texas and Oklahoma. Chen was assigned responsibility to audit the allowance for patient receivables. For the past several years, AHA's accounting policy required that the recorded allowance for patient receivables be set to equal the total amount of receivables over 180 days past due. Prior audit testing of the allowance in previous years has found that the subsequent write-offs of patient receivables has closely approximated the amount included in the allowance. During the current year audit, Chen examined the amount recorded in the general ledger allowance account and reconciled that amount to the amount shown in AHA's consolidated aged trial balance in the 180 days past due amount. Given that the dollar amounts agreed, Chen concluded that the allowance was in accordance with AHA accounting policy and tairly stated. While media reports and other industry publications suggested that recent regulatory changes in healthcare insurance were affecting patients' ability to pay, Chen concluded that AHA's allowance was fairly stated given the amounts complied with AHA's policy Anchoring judgment trap Availability judgment trap Confirmation judgment trap Overconfidence judgment trap 2. Sherry Zipersky was assigned responsibility for evaluating the goodill impairment testing process at Georgia Metals, Inc. Because Georgia Metals growth strategy was based mostly on acquisitions, the company had experience in performing annual impairment tests of goodwill. The client provided Sherry extensive information along with detailed schedules that documented management's testing approaches, and it provided her support for key assumptions made by management. Sherry reviewed the schedules in detail and tested the key calculations. While Sherry's firm has a number of valuation specialists as part of its staff, Sherry decided not to request their assistance in making an independent assessment of goodwill impairment given that the client's documentation was extensive and it would take too much time to have the firm's valuation specialists complete an independent assessment. 3. Jason Jackson was responsible for auditing the occurrence of sales transactions in the audit of Asheville Manufacturing. As part of his testing, he reviewed the contracts signed between Asheville Manufacturing and its customers to determine that the transaction terms justified the recording of sales for the year under audit. In addition, he examined documentation related to the sales transactions, including the customers' purchase orders、shipping documents, and invoices generated by Asheville That evidence examined supported the correct recording of sales in the current year. However, Jason also noticed in the customer files copies of email exchanges between Asheville Manufacturing sales agents and the customers suggesting that some of the terms of the sales agreements could be waived at the customers' discretion. Jason decided to rely on the contracts and sales transactions documentation to conclude that the sales were properly stated, given that the other information was only included in emails. 4 Allison Garrett works on a number of audits of technology equipment manufacturers and has developed extensive knowledge and experience in the industry. On the recent audit engagement of financial statements for Zurich Technologies, Allison was responsible for auditing the valuation of inventories, including the reserve for obsolescence. Given her familiarity with the industry, Allison decided to conduct a quick substantive analytical procedure regarding the days in inventory and determined that the reserve was fairly stated, given it was in line with reserves established by some of her other clients. She determined that additional evidence was not necessary to obtain because of her experience with other clients