An Auditor Should Perform Alternative Procedures to Substantiate the Existence

question 107

Multiple Choice

An auditor should perform alternative procedures to substantiate the existence of accounts receivable when

• A)no reply to a positive confirmation request is received.
• B)no reply to a negative confirmation request is received.
• C)collectability of the accounts receivable is in doubt.
• D)pledging of the accounts receivable is probable.

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Definitions:

Responsibilities

Duties or obligations that an individual or organization is required or expected to perform.

Decentralization

The distribution of decision-making powers and operational activities away from a central authoritative location or group.

Advantage

A condition or circumstance that puts one in a favorable or superior position.

Cost Driver

A cost driver is a factor that causes a change in the cost of an activity, influencing the cost of production and operation in both direct and indirect cost management.