The Auditor Obtains Corroborating Audit Evidence for Accounts Receivable by Using

question 13

Multiple Choice

The auditor obtains corroborating audit evidence for accounts receivable by using positive or negative confirmation requests.Under which of the following circumstances might the negative form of the accounts receivable confirmation be useful?

• A)A substantial number of accounts are in dispute.
• B)Internal control over accounts receivable is ineffective.
• C)Client records include a large number of relatively small balances.
• D)The auditor believes that recipients of the requests are unlikely to give them consideration.

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Definitions:

Retirement

The act of leaving one's job and ceasing to work, typically due to age, with various financial planning strategies employed to ensure financial security.

Future Interest

A legal right to property ownership, possession, or enjoyment that begins at a future date.

Effective Interest Method

A technique used in accounting to allocate the discount or premium on bonds payable over their life to interest expense, reflecting a constant rate of interest.

Semiannual

Happening every six months or twice annually.