Confirming Accounts Receivable Is an Accepted Audit Procedure Whenever

question 30

Multiple Choice

Confirming accounts receivable is an accepted audit procedure whenever:

• A) they are material in amount.
• B) it is reasonable to presume debtors will respond.
• C) they are material and it is reasonable to presume debtors will respond.
• D) a large number of small balances is involved.

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Definitions:

Vicariously Liable

A legal principle where one party is held responsible for the actions or omissions of another party, often used in employer-employee relations.

Wrongful Acts

Actions or behaviors that are illegal or morally incorrect according to societal norms.

Partnership Business

A sanctioned business model that entails a partnership between individuals, distributing both management roles and profit allocations.

Innocent Partner

A member of a partnership who is not aware of any wrongful behavior or fraudulent activity committed by their partner(s) within the business operations.