Trade receivables Balotelli’s trade receivables have historically been low as most customers are required to pay in advance or at the time of visiting the hotel. However, during the year a number of companies opened corporate accounts which are payable monthly in arrears. As such, the trade receivables balance has risen significantly and is now a material balance. 9 As trade receivables is a material balance, the audit partner has asked that the audit team carry out a trade receivable circularisation. Which of the following are benefits of carrying out a trade receivables circularisation? (1) It provides evidence from an independent external source (2) It provides sufficient appropriate audit evidence over all relevant balance assertions (3) It improves audit efficiency as all customers are required to respond (4) It improves the reliability of audit evidence as the process is under the control of the auditor