If It Is Impracticable to Confirm Accounts Receivable but the Auditor

question 47

Multiple Choice

If it is impracticable to confirm accounts receivable but the auditor obtains sufficient, appropriate evidence to verify the receivable balance by performing alternative procedures, the auditor's opinion should be unqualified.The audit report should

• A)Disclose the fact that alternative procedures were used because of a client-imposed scope limitation.
• B)Disclose in the opinion paragraph that confirmation of accounts receivable was impracticable.
• C)Not mention the alternative procedures.
• D)Include an explanatory paragraph that discloses the performance of alternative procedures.

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Definitions:

Demand for Cars

Demand for Cars represents consumers' desire and ability to purchase cars, influenced by factors such as price, income levels, and personal preferences.

Short Run

A period during which at least one of a firm's inputs is fixed and cannot be changed.

Long Run

A period in economics where all factors of production and costs are variable, and firms can adjust all inputs according to market demands.

Arc Elasticity

A method for calculating elasticity between two points on a demand curve using the midpoint formula.