In Auditing Accounts Receivable, the Negative Form of Confirmation Request

question 923

Multiple Choice

In auditing accounts receivable, the negative form of confirmation request most likely would be used when:

• A) The total recorded amount of accounts receivable is immaterial to the financial statements taken as a whole.
• B) Response rates in prior years to properly designed positive confirmation requests were inadequate.
• C) Recipients are likely to return positive confirmation requests without verifying the accuracy of the information.
• D) The combined assessed level of inherent risk and control risk relative to accounts receivable is low.

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Definitions:

Exchange Rates

The worth of one currency in relation to another, establishing how much of one currency can be exchanged for another.

Exchange Rate

The worth of a particular currency when converted into a different currency.

France

A country located in Western Europe known for its historical and cultural significance, notable landmarks, and as a global center for art, science, and philosophy.

Exchange Rate

The value of one currency for the purpose of conversion to another, indicating how much of one currency can be exchanged for another.