How Does the Auditor Gather Evidence Using the Confirmation Process

question 34

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)The client prepares the confirmation letters and the auditor mails the letters
• C)Management can choose to send either positive or negative confirmations
• D)The auditor prepares the confirmation letters and the client mails the letters
• E)Negative confirmations request the customer to return the confirmation directly to the auditor only if the balance is correct

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Definitions:

Demand Schedule

A demand schedule is a table that shows the quantity of a good that consumers are willing to buy at various price levels.

Cheeseburgers

A popular type of sandwich consisting of one or more cooked patties of ground meat, placed inside a sliced bread roll or bun, often accompanied by cheese, lettuce, tomato, onions, pickles, and other condiments.

Costs

The amount of money required to purchase, produce, or maintain something.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price.