If It Is Impracticable to Confirm Accounts Receivable but the Auditor

question 47

Multiple Choice

If it is impracticable to confirm accounts receivable but the auditor obtains sufficient,appropriate evidence to verify the receivable balance by performing alternative procedures,the auditor's opinion should be unqualified.The audit report should ________.

• A)disclose the fact that alternative procedures were used because of a client-imposed scope limitation
• B)disclose in the opinion paragraph that confirmation of accounts receivable was impracticable
• C)not mention the alternative procedures
• D)include an explanatory paragraph that discloses the performance of alternative procedures

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Definitions:

Efficiency

The extent to which resources are used optimally to achieve the desired output, often maximizing productivity while minimizing waste.

Output Market

A marketplace in which finished goods and services are traded, involving businesses selling to consumers or other businesses.

Marginal Rate

The rate of change in a quantity or cost in response to a one-unit change in another variable.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs.