Auditors Are Concerned with the Addresses Provided for Customers in the Confirmation

question 68

Multiple Choice

Auditors are concerned with the addresses provided for customers in the confirmation of accounts receivable because of which of the following reasons?

• A) Confirmations are selected based upon zip codes.
• B) A P.O. Box is more reliable than a street address.
• C) Confirmations should be sent only to business addresses and not residential.
• D) The address may be routed to the client for retrieval and fraudulent signing.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in a specified period.

Table: Price Elasticity

A tabulated representation that shows how the quantity demanded of a good or service responds to changes in its price, indicating the sensitivity of consumers to price changes.

Midpoint Formula

A method used in economics and mathematics to calculate the average of two points on a line, often employed to find the elasticity of demand.

Chocolate-Covered Peanuts

Peanuts that have been coated in chocolate, serving as a sweet and crunchy snack.