Auditors Are Concerned with the Addresses Provided for Customers in the Confirmation

question 79

Multiple Choice

Auditors are concerned with the addresses provided for customers in the confirmation of accounts receivable because of which of the following reasons?

• A)Confirmations are selected based upon zip codes.
• B)A P.O.box is more reliable than a street address.
• C)Confirmations should be sent only to business addresses and not residential.
• D)The address may be routed to the client for retrieval and fraudulent signing.

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Definitions:

Good Faith Purchaser

An individual who buys something without knowledge of a prior claim or lien against the property, therefore acquiring clean title.

Risk Of Loss

The potential for an asset to be lost, damaged, or diminished in value, and the question of who bears this risk under the terms of a contract.

Agreement Of Parties

This refers to the mutual understanding and consent between parties involved in a contract regarding the terms and conditions stated.

Voidable Title

A title to goods that is valid until annulled or rescinded due to certain conditions, such as fraud or misrepresentation.