The Confirmation of Customers' Accounts Receivable Rarely Provides Reliable Evidence

question 62

Multiple Choice

The confirmation of customers' accounts receivable rarely provides reliable evidence about the completeness assertion because

• A) Many customers merely sign and return the confirmation without verifying its details.
• B) Recipients usually respond only if they disagree with the information on the request.
• C) Customers may not be inclined to report understatement errors in their accounts.
• D) Auditors typically select many accounts with low recorded balances to be confirmed.

---

Definitions:

Marginal Utility

The extra pleasure or benefit obtained from the consumption of an additional unit of a product or service.

Money Income

refers to the total income received by an individual or household in monetary form, including wages, salaries, benefits, and investment income.

Indifference Curve

A graph showing different bundles of goods between which a consumer is indifferent, reflecting preferences and utility maximization.

Price Increase

Refers to a situation where the cost of goods or services rises over a period of time.