In the Confirmation of Accounts Receivable, the Auditor Would Most

question 52

Multiple Choice

In the confirmation of accounts receivable, the auditor would most likely:

• A)send negative confirmations when the assessed risk of material misstatement is high.
• B)seek to obtain positive confirmations for at least 50% of the total dollar amount of the receivables.
• C)require confirmation of all receivables from agencies of the federal government.
• D)require that confirmation requests be sent as soon as possible after fiscal year-end.

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Definitions:

Enforce

To compel obedience to a law, rule, or obligation through the imposition of penalties or other legal mechanisms.

Warranty Liability

Legal obligation of a seller to compensate the buyer for losses caused by defects or failures in the product warranted.

In Blank

Pertains to a document, especially a financial instrument, left partially unfilled or unsigned, allowing for details to be added later.

Transfer Warranties

Legal assurances provided during the transfer of assets, ensuring certain conditions or elements are true or will be upheld.