How Does the Auditor Gather Evidence Using the Confirmation Process

question 89

Multiple Choice

How does the auditor gather evidence using the confirmation process?

• A)The client selects a sample of customer balances from the year-end accounts receivable subsidiary ledger
• B)Each of the customers selected for confirmation will be sent a letter asking him to confirm the balance that he owes the audit client at year-end
• C)Management can choose to send either positive or negative confirmations
• D)Positive confirmations request the customer to return the confirmation directly to the auditor if the balance is correct or incorrect
• E)Negative confirmations request the customer to return the confirmation directly to management only if the balance is incorrect
• F)Both A and B
• G)Both B and D
• H)Both A and C

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Definitions:

Business Location

The physical or virtual place where a company is situated or conducts its operations, which can significantly impact its success.

Thousands Of

A term indicating a large, unspecified number, usually implying a magnitude of at least several thousand.

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Companies with limited revenue, employees, or resources, typically defined by government criteria for size standards.

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An expression suggesting an approximate quantity or range, often used in the context of counting or estimating.