When Accounts Receivable Are Confirmed at an Interim Date,auditors Need

question 72

Multiple Choice

When accounts receivable are confirmed at an interim date,auditors need not be concerned with

• A) Obtaining a summary of receivables transactions from the interim date to the year-end date.
• B) Obtaining a year-end trial balance of receivables, comparing it to the interim trial balance, and obtaining evidence and explanations for large variations.
• C) Sending negative confirmations to all the customers as of the year-end date.
• D) Considering the necessity for some additional confirmations as of the balance sheet date if balances have increased materially.

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Definitions:

Operating Activities

The principal revenue-producing activities of an entity and other activities that are not investing or financing activities.

Statement Of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Non-Current Assets

Assets that are expected not to be converted into cash within a year and are long-term resources of a company, such as property, plant, and equipment.

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.