In Auditing Accounts Receivable, the Negative Form of Confirmation Request

question 86

Multiple Choice

In auditing accounts receivable, the negative form of confirmation request most likely would be used when:

• A)recipients are likely to return positive confirmation requests without verifying the accuracy of the information.
• B)the combined assessed level of inherent and control risk relative to accounts receivable is low.
• C)a small number of accounts receivable are involved but a relatively large number of errors are expected.
• D)the auditor performs a dual purpose test that assesses control risk and obtains substantive evidence.