Negative Confirmation of Accounts Receivable Is Less Effective Than Positive

question 5

Multiple Choice

Negative confirmation of accounts receivable is less effective than positive confirmation of accounts receivable because:

• A)a majority of recipients usually lacks the willingness to respond objectively.
• B)some recipients may report incorrect balances that require extensive follow up.
• C)the auditor cannot infer that all nonrespondents have verified their account information.
• D)negative confirmations do not produce evidential matter that is statistically quantifiable.

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Definitions:

Condition Subsequent

A legal term that describes a condition in a contract that, if fulfilled, terminates the obligation or contract itself.

Debt Discharged

The condition in which a debt is legally eliminated, and the debtor is no longer financially obligated to pay it back.

Substituted Agreement

A legal principle where the parties involved agree to replace a previously made agreement or contract with a new one.

Fence Repairs

Maintenance actions taken to fix or restore fences to their original condition or functionality.