To Reduce the Risks Associated with Accepting Electronic Responses to Requests

question 17

Multiple Choice

To reduce the risks associated with accepting electronic responses to requests for confirmation of accounts receivable, an auditor most likely would:

• A)validate the sender of electronic information.
• B)examine subsequent cash receipts for the accounts in question.
• C)consider the electronic responses to the confirmations to be exceptions.
• D)mail second requests to the electronic respondents.

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Definitions:

Liquidated Damage Clauses

Provisions in a contract specifying a predetermined amount of damages to be paid if one party breaches the contract.

Void

A term describing a contract or legal agreement that lacks legal force or validity from the outset.

Condition Precedent

In a contract, an event that must occur for a party’s duty to arise.

Condition Subsequent

In a contract, a future event that terminates the obligations of the parties when it occurs.