Auditors May Use Positive And/or Negative Forms of Confirmation Requests

question 6

Multiple Choice

Auditors may use positive and/or negative forms of confirmation requests for accounts receivable. Which of the following statements is true regarding the auditor's use of confirmations?

• A)The positive confirmation form must always be used to confirm all balances regardless of size.
• B)A combination of the two confirmation types can be used, with the positive form used for large balances and the negative form used for small balances.
• C)A combination of the two confirmation types can be used, with the positive form used for trade receivables and the negative form for other receivables.
• D)The positive confirmation form should be used when controls related to receivables are satisfactory and the negative confirmation form should be used when controls related to receivables are unsatisfactory.

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Definitions:

Membership Publications

Publications, such as newsletters or journals, provided exclusively to the members of an organization or club.

Firearms Legislation

Laws and regulations pertaining to the manufacture, sale, possession, and use of firearms.

NRA

National Rifle Association, a US organization advocating for gun rights and firearm ownership.

Direct Technique

A method used by interest groups to influence government officials directly, through lobbying or other forms of direct contact.