In the Audit of Accounts Receivable, the Negative Form of Confirmation

question 41

Multiple Choice

In the audit of accounts receivable, the negative form of confirmation request is most likely to 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 is 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:

Active Effort

The deliberate and purposeful exertion of energy towards achieving specific goals or tasks.

Repression

A defense mechanism where distressing thoughts, memories, or desires are unconsciously blocked from conscious awareness.

Ego

In psychoanalytic theory, the part of the personality responsible for dealing with reality by mediating between the id, superego, and the external world.

Displacement

in psychology, is a defense mechanism where a person redirects a negative emotion from its original source to a less threatening recipient.