An Auditor Should Perform Alternative Procedures to Substantiate the Existence

question 26

Multiple Choice

An auditor should perform alternative procedures to substantiate the existence of accounts receivable when ________.

• A)there is no response to a positive confirmation request
• B)there is no response to a negative confirmation request
• C)collectability of the receivables is in doubt
• D)pledging of the receivables is probable

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Definitions:

Misrepresents

Providing false or misleading information or statements.

Legal Right

A legal right is an entitlement or permission backed by law or legal principles.

Disaffirm

The legal act of declaring a contract voidable, renouncing or refusing to recognize an engagement.

Emancipated Minor

A person under the age of majority who is legally granted most adult rights and responsibilities by court order or other means.