A Positive Confirmation Is More Reliable Evidence Than a Negative

question 81

Multiple Choice

A positive confirmation is more reliable evidence than a negative confirmation because:

• A) the auditor has a document which can be used in court.
• B) follow- up procedures can be performed if a response is not received from the debtor.
• C) the debtor's lack of response indicates agreement with the stated balance.
• D) fewer confirmations can be sent out.

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Definitions:

Simple Interest

Interest calculated only on the initial amount of money deposited or loaned, not on any interest accrued over time.

Ordinary Interest

Interest calculated based on a 360-day year, often used in banking for loans and savings.

Exact Interest

Interest calculated based on the actual number of days in a year or a specific time period, often used in financial transactions.

Exact Interest

A precise calculation of interest accrual that adheres strictly to the actual number of days in the calendar year, often set at 365 or 366 days.