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:

Alkyl Group

A group of atoms derived from an alkane, containing only carbon and hydrogen atoms, arranged in a chain.

Aspartic Acid

An amino acid that plays a vital role in the biosynthesis of proteins and in neurotransmitter release and synthesis.

pI

The isoelectric point of a molecule, which is the pH at which the molecule carries no net electrical charge.

Predominant Form

Predominant form refers to the most stable or commonly occurring form of a chemical species under given conditions.