Confirmations of Receivables You Are the Auditor of Maple Bank for the Year

question 82

Essay

Confirmations of receivables
You are the auditor of Maple Bank for the year 2012.Maple has a large number of customers with consumer loan accounts.The loan accounts have balances averaging $800 in a homogeneous population and the customers usually pay close attention to their balances.
Your preliminary assessment of internal control over the loan area is that control risk is low and results of tests of controls support that assessment.Inherent risk is deemed to be lower as well.
Discuss the confirmation process and the types of confirmations that may be used for the audit of Maple Bank.Which confirmation type would you select for Maple and why?

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Definitions:

Marked Attachment

Marked attachment refers to a strong emotional bond, typically between a child and a caregiver, characterized by the child's tendency to seek proximity to the caregiver for security and comfort.

Same-Sex Parent

A parent who is of the same gender as their child or who identifies as homosexual.

Psychologists

Professionals who study mental processes, behavior, and the mind, often working in academic, research, or clinical settings.

Projective

Relating to tests or techniques designed to reveal hidden emotions and internal conflicts by interpreting people’s responses to ambiguous stimuli.