A Client Has a Separate Sales Group for Its Largest

question 71

Multiple Choice

A client has a separate sales group for its largest "preferred" customers. This is a select group of customers that normally make purchases in excess of $250,000 and often have accounts receivable balances in excess of $1 million. Which of the following audit procedures would the auditor most likely perform?

• A)Prepare a schedule of purchases and payments for these customers.
• B)Send out negative confirmations on a large sample of these customers.
• C)Inquire of the sales manager regarding the accounts receivable terms.
• D)Send out positive confirmations on a large sample of these customers.

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Definitions:

Parental Response

The reaction or behavior of parents in response to a certain behavior, need, or demand from their children.

Similarly

In a manner that shows likeness or comparability in aspects, characteristics, or effects.

Evolutionary Psychology

The theoretical approach in psychology that attempts to explain useful mental and psychological traits—such as memory, perception, or language—as adaptations, i.e., as the functional products of natural selection.

Competitive Dispositions

The inherent or developed inclination of individuals or groups to engage in competition, striving to outperform others or achieve superiority.