The Auditors Obtain Audit Evidence for Accounts Receivable by Using

question 63

Multiple Choice

The auditors obtain audit evidence for accounts receivable by using positive or negative confirmation requests. Under which of the following circumstances might the negative form of the accounts receivable confirmation be useful?

• A) A substantial number of accounts are in disputes.
• B) The combination of inherent risk and control risk is high.
• C) Client records include a large number of relatively small balances.
• D) The auditors believe that recipients of the requests are unlikely to give them consideration.

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Definitions:

Tablespoon

A unit of measure used in cooking, equal to three teaspoons or approximately 15 milliliters.

Prescription

A physician's written order for medication.

Millimeters

A metric unit of length equal to one thousandth of a meter.

Kilometer

A unit of length in the metric system, equal to 1,000 meters.