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:

Synergy

The collaboration between two or more entities, materials, or agents that results in a collective impact exceeding the total of their individual contributions.

Collective Task

A task that requires the collaboration and effort of multiple individuals or groups to achieve a common goal.

Discretionary

Pertaining to or involving the use of judgment and the ability to make decisions that are not dictated by strict rules or protocols.

Individual Inputs

Refers to the contributions or efforts made by individual members within a group or team setting, which can influence the overall group dynamics and outcomes.