An Operational Audit Report Which Deals with the Accounts Receivable

question 27

Multiple Choice

An operational audit report which deals with the accounts receivable department of a wholesaler is most likely to address:

• A)The efficiency and effectiveness of the customer collections and include any findings requiring corrective action.
• B)Whether accounts receivable is reported net of an allowance for uncollectible accounts.
• C)Whether the major customer accounts receivable have been confirmed.
• D)Whether the accounts receivable account includes any related party transactions.

---

Definitions:

Availability Bias

A cognitive bias where individuals overestimate the importance of information that is readily available to them.

Adjustment Bias

A cognitive bias that affects the decision-making process, leading individuals to make decisions based on adjustments from a reference point.

Lack-of-participation Error

Describes a situation where the absence of employee involvement in decision-making leads to decreased morale, motivation, and potentially suboptimal outcomes.

Confirmation Error

A bias in decision-making where individuals favor information that confirms their pre-existing beliefs or hypotheses.