Why Auditor Enquiry Management in Case of Dispute with Customer
Auditor enquiry management is crucial when there is a dispute with a customer regarding advance received by the entity. Here's why:

Ensuring Accuracy of Financial Statements
- Auditors need to investigate the dispute to ensure the accuracy of the financial statements. They need to verify if the advance received from the customer has been appropriately recorded in the books of accounts.

Compliance with Accounting Standards
- Auditors need to ensure that the treatment of the advance received complies with relevant accounting standards. They need to verify if the revenue recognition criteria have been met and if the advance has been recognized as a liability.

Risk of Misstatement
- Disputes with customers regarding advances can indicate a risk of material misstatement in the financial statements. Auditors need to assess the impact of the dispute on the financial statements and take appropriate action to address any potential misstatements.

Legal Implications
- Auditors need to consider the legal implications of the dispute with the customer. They need to assess the likelihood of the customer demanding a refund of the advance and the potential impact on the entity's financial position.

Maintaining Stakeholder Confidence
- Addressing disputes with customers in a timely and transparent manner is essential for maintaining stakeholder confidence. Auditors play a crucial role in investigating the dispute, providing assurance to stakeholders, and ensuring the integrity of the financial reporting process.
In conclusion, auditor enquiry management is essential in case of disputes with customers regarding advances received by the entity. Auditors need to investigate the dispute, ensure compliance with accounting standards, address the risk of misstatement, consider legal implications, and maintain stakeholder confidence.