An Auditor Should Normally Perform Alternative Procedures to Substantiate the Existence

question 85

Multiple Choice

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

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

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Definitions:

Inference

The process of drawing logical conclusions from premises or evidence.

Bootstrap Confidence Interval

A statistical method for estimating the confidence interval of a parameter by resampling the original data with replacement.

Bootstrap Distribution

The distribution of a large number of bootstrap samples' statistics, used for estimating the shape of the true distribution of a statistic.

Normal

A term often used to describe data following a bell-shaped, symmetrical distribution around a central value, with predictable patterns as far as spread and outliers.