Which of the following would indicate the need to use positive accounts receivable confirmation requests?
A)A large population consisting of small balances.
B)Good internal control over accounts receivable.
C)Most accounts are with large reputable companies.
D)A large number of accounts receivable are in dispute.

Question

Quizplus · Accepted Answer

Positive accounts receivable confirmation requests are typically used when there are a large number of accounts receivable that are in dispute, as they provide a reliable way to confirm the accuracy of the amounts owed. A large population consisting of small balances (A) may be tested using alternative sampling methods. Good internal control over accounts receivable (B) and having most accounts with large reputable companies (C) may indicate less risk of material misstatement in the accounts, but do not necessarily indicate a need for positive confirmation requests specifically.

Which of the Following Would Indicate the Need to Use