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:

Rogers

Carl Rogers was an influential American psychologist who founded the client-centered or person-centered approach to psychology, focusing on the importance of the self and the individual's experience.

Maslow

A psychologist best known for creating Maslow's hierarchy of needs, a theory in psychology comprising a five-tier model of human needs, from basic (physiological) to more complex (self-actualization) needs.

Sullivan's Interpersonal Personality Theory

A theory proposed by Harry Stack Sullivan that emphasizes the role of interpersonal relationships and social experiences in shaping personality development.

Close Relationships

Interpersonal relationships characterized by strong, deep, or close association or acquaintance, which can include emotional bonds, such as friendships, family, and romantic partnerships.