In the Audit of Accounts Receivable, the Negative Form of Confirmation

question 2

Multiple Choice

In the audit of accounts receivable, the negative form of confirmation request is most likely to be used when

• A)Recipients are likely to return positive confirmation requests without verifying the accuracy of the information.
• B)The combined assessed level of inherent and control risk relative to accounts receivable is low.
• C)A small number of accounts receivable is involved but a relatively large number of errors are expected.
• D)The auditor performs a dual-purpose test that assesses control risk and obtains substantive evidence.

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Definitions:

Undercut Dimensions

Measurements related to features not easily visible or accessible because they're under other surfaces, often challenging to machine or measure.

Taper Ratio

The ratio indicating the change in diameter of a tapered object over its length, commonly used in engineering to specify conical elements.

Conical Taper

The gradual reduction or increase in diameter from one end of a cylindrical object to the other, forming a cone-like shape.

Shims

Thin pieces of material used to fill small gaps or spaces between objects, often for adjustment, leveling, or support purposes.