Which One of the Following Circumstances Would Indicate That Negative

question 61

Multiple Choice

Which one of the following circumstances would indicate that negative confirmations should NOT be used on an engagement?

• A) A significant portion of the total accounts receivable is represented by a small number of accounts with large balances.
• B) The auditor is unaware of disputed or inaccurate accounts.
• C) The internal control over receivables is good.
• D) The recipients are mostly businesses rather than individuals.

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Definitions:

Competition Act

Legislation aimed at promoting fair business practices and competition by preventing monopolies, anti-competitive practices, and other constraints on commerce.

Misleading Advertisement

Advertising that deceives or is likely to deceive the audience, potentially leading them to make purchasing decisions they would not have otherwise made.

Conviction

A formal declaration that someone is guilty of a criminal offense, made by the verdict of a jury or the decision of a judge in a court of law.

Competition Act

Legislation designed to promote or maintain market competition by regulating anti-competitive conduct among companies.