Identify theoption which does not includes in the negative form of accounts receivable confirmation.

Question

1. The negative form of accounts receivable confirmation request is particularly useful except when a. Individual account balances are relatively large b. Internal control surrounding accounts receivable is considered to be effective c. A large number of small balances are involved d. The auditor has reason to believe the persons receiving the request are likely to give them consideration 2. The starting point for the verification of the balance in the general ledger account is to obtain a. A bank reconciliation from the client b. The client’s cash account from the general ledger c. A cutoff bank statement directly from the bank d. The client’s year-end bank statement

Answer 1

Question

Chapter 16, Problem 21.3MCQ

To determine

Identify theoption which does not includes in the negative form of accounts receivable confirmation.

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1. The negative form of accounts receivable confirmation request is particularly useful except when a. Individual account balances are relatively large b. Internal control surrounding accounts receivable is considered to be effective c. A large number of small balances are involved d. The auditor has reason to believe the persons receiving the request are likely to give them consideration 2. The starting point for the verification of the balance in the general ledger account is to obtain a. A bank reconciliation from the client b. The client’s cash account from the general ledger c. A cutoff bank statement directly from the bank d. The client’s year-end bank statement

Which of the following statements is invalid relating to confirmation of accounts receivable? a. A negative form of confirmation is preferable to use when individual account balances of customers are relatively smallb. A positive confirmation provides more reliable evidence than the negative confirmation because the auditor can perform follow-up procedures if no response is received from the debtorc. An auditor must consider using the negative form of confirmation when there is reason to believe that there may be a substantial number of accounts in dispute or with inaccuracies or irregularitiesd. In negative confirmation, failure to reply must be regarded as a correct response, even though the debtor may have ignored the confirmation requeste. None of the above

Choose the one correct answer. Which of the following statements is invalid relating to confirmation of accounts receivable? a. A negative form of confirmation is preferable to use when individual account balances of customers are relatively smallb. A positive confirmation provides more reliable evidence than the negative confirmation because the auditor can perform follow-up procedures if no response is received from the debtorc. An auditor must consider using the negative form of confirmation when there is reason to believe that there may be a substantial number of accounts in dispute or with inaccuracies or irregularitiesd. In negative confirmation, failure to reply must be regarded as a correct response, even though the debtor may have ignored the confirmation requeste. None of the above