A Positive Confirmation Is More Reliable Evidence Than a Negative

question 102

Multiple Choice

A positive confirmation is more reliable evidence than a negative confirmation because:

• A) fewer confirmations can be sent out.
• B) the debtor's lack of response indicates agreement with the stated balance.
• C) the auditor has a document which can be used in court.
• D) follow-up procedures can be performed if a response is not received from the debtor.

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Definitions:

Investment

Allocation of resources, usually money, in the expectation of generating an income or profit.

Maturity Value

The amount payable to the holder of a financial instrument at the end of its term, including both the principal and interest.

Investment

Investment refers to the act of allocating resources, usually money, with the expectation of generating an income or profit.

Periodic Interest Rate

The interest rate charged on a loan or realized on an investment over a specific period of time.