In Auditing Accounts Receivable, the Negative Form of Confirmation Request

question 64

Multiple Choice

In auditing accounts receivable, the negative form of confirmation request most likely would be used when

• A) Recipients are likely to return positive confirmation requests without verifying the accuracy of the information.
• B) The combined assessed level of inherent and control risk relative to accounts receivable is low.
• C) A small number of accounts receivable are involved but a relatively large number of errors are expected.
• D) The auditor performs a dual purpose test that assesses control risk and obtains substantive evidence.

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Definitions:

Generativity

A stage of adult development characterized by the desire to create or nurture things that will outlast the individual, often by guiding the next generation.

Stagnation

A state of inactivity or lack of development, often marked by a lack of progress or creativity.

Ego Integrity

A stage of psychological development in late adulthood as described by Erik Erikson, characterized by the ability to look back on life with a sense of fulfillment and no regret.

Adulthood Stage

A phase in human development characterized by full physical development, maturity, and the assumption of responsibilities.