An Auditor Should Perform Alternative Procedures to Substantiate the Existence

question 19

Multiple Choice

An auditor should perform alternative procedures to substantiate the existence of an accounts receivable when:

• A) no reply to a negative confirmation request is received.
• B) no reply to a positive confirmation request is received.
• C) pledging of the receivable is probable.
• D) collectability of the receivable is in doubt.

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Definitions:

High-Income Taxpayers

Individuals who are in the upper brackets of the tax scale, typically subject to higher tax rates and additional taxes on investment income.

Itemized Deductions

Expenses that taxpayers can subtract from their gross income to reduce the taxable income, including payments like mortgage interest, state taxes, and charitable contributions, as specified by the IRS.

Forfeit

The loss of any right, privilege, or property because of a breach of obligation or failure to meet a requirement.

Mileage Reimbursement

Compensation for fuel and wear-and-tear expenses for the use of a personal vehicle for business purposes, usually calculated by the mile.