Realizable Value Is an Essential Balance-Related Audit Objective for Accounts

question 41

Multiple Choice

Realizable value is an essential balance-related audit objective for accounts receivable because collectibility of receivables is often a significant concern. Which of the following is not an internal control the auditor should evaluate to reduce the likelihood of uncollectible accounts?

• A) customer credit approval by appropriate personnel
• B) preparation of an aged trial balance reviewed and followed up by appropriate management personnel
• C) a written policy of writing off uncollectable receivables
• D) All of the above are internal controls the auditor should evaluate.