The Most Reliable Evidence from Confirmations Is Obtained When They

question 41

Multiple Choice

The most reliable evidence from confirmations is obtained when they are sent

• A) as close to the balance sheet date as possible.
• B) at various times throughout the year to different segments of the sample, so that the entire sample is representative of account balances scattered throughout the year.
• C) several months before the year-end, so the auditor will have adequate time to perform alternate procedures if they are required.
• D) at various times throughout the year to the same group in the sample, so that the sample will not have a time bias.

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Definitions:

Specific Date

A particular day singled out from others because of its significance or relevance to an event or action.

Supplies on Credit

The acquisition of business supplies with an agreement to pay the supplier at a later date.

Accounting Equation

The fundamental equation of double-entry bookkeeping, stating that assets equal liabilities plus equity (Assets = Liabilities + Equity).

Services Provided

Work performed by one party for another without the supply of tangible goods. Examples include consulting, marketing, maintenance, and legal services.