The Auditor Obtains Corroborating Audit Evidence for Accounts Receivable by Using

question 13

Multiple Choice

The auditor obtains corroborating audit evidence for accounts receivable by using positive or negative confirmation requests.Under which of the following circumstances might the negative form of the accounts receivable confirmation be useful?

• A)A substantial number of accounts are in dispute.
• B)Internal control over accounts receivable is ineffective.
• C)Client records include a large number of relatively small balances.
• D)The auditor believes that recipients of the requests are unlikely to give them consideration.

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Definitions:

Sample Mean

The sample mean is the average value of a sample set, calculated by adding together all of the observations and dividing by the number of observations.

Skewed to the Right

Describes a distribution of data that has a tail extending to the right, indicating that the majority of data points are on the left.

Sample Mean

The arithmetic average of a set of sample observations, used as an estimate of the population mean.

Sampling Distribution

The framework of chances for a specific statistic, selected randomly.