Negative Confirmations of Accounts Receivable Are Less Effective Than Positive

question 38

Multiple Choice

Negative confirmations of accounts receivable are less effective than positive confirmations because when using negative confirmations:

• A) the auditor cannot infer that all nonrespondents have verified their account information.
• B) they do not produce evidential matter that is statistically quantifiable.
• C) some recipients may report incorrect balances that require extensive follow-up.
• D) a majority of recipients usually lacks the willingness to respond objectively.

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Definitions:

Guilds

Medieval associations of artisans or merchants who oversaw the practice of their craft/trade in a particular town, often having considerable power.

Landscape Depiction

An artistic representation that focuses on the portrayal of natural scenery such as mountains, valleys, trees, rivers, and forests.

Konrad Witz

A Swiss painter of the 15th century known for his innovative use of landscape in religious panel paintings.

Lake Geneva

A large freshwater lake on the northern side of the Alps, shared between Switzerland and France, known for its picturesque beauty and the numerous cities and towns along its shores.