If the Auditor Failed to Confirm Receivables When That Should

question 21

Multiple Choice

If the auditor failed to confirm receivables when that should have been done and it may be too late to confirm now,what should the auditor do?

• A)Issue an adverse opinion.
• B)Extend the previous work done on subsequent collections to help determine that the receivables existed and were properly valued at the balance sheet date.
• C)Automatically decide that the previously issued audit report cannot be supported in light of the omitted procedures.
• D)Issue a disclaimer of opinion.

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Definitions:

Held-to-Maturity Debt Securities

Investments in debt securities that a company has the positive intent and ability to hold until maturity.

Financial Statements

Compiled reports that provide an overview of a business’s financial condition, including income statement, balance sheet, and cash flow statement.

Return on Total Assets

A profitability ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets.

Performance

Refers to the act of carrying out or accomplishing an action, task, or function.