Negative Confirmation of Accounts Receivable Is Less Effective Than Positive

question 384

Multiple Choice

Negative confirmation of accounts receivable is less effective than positive confirmation of accounts receivable because:

• A) A majority of recipients usually lack the willingness to respond objectively.
• B) Some recipients may report incorrect balances that require extensive follow-up.
• C) The auditor cannot infer that all nonrespondents have verified their account information.
• D) Negative confirmations do not produce audit evidence that is statistically quantifiable.

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Definitions:

Phonemes

The smallest units of sound in a language that distinguish one word from another.

Linguistic Heuristics

Mental shortcuts or rules of thumb that help individuals quickly understand and make decisions based on language use.

Morpheme

The smallest grammatical unit in a language that carries semantic meaning.

Cognition

The mental process of acquiring knowledge and understanding through thought, experience, and the senses.