An auditor should perform alternative procedures to substantiate the existence of accounts receivable when
A) no reply to a positive confirmation request is received.
B) no reply to a negative confirmation request is received.
C) collectibility of the receivables is in doubt.
D) pledging of the receivables is probable.

Question

Quizplus · Accepted Answer

When no reply is received to a positive confirmation request, auditors perform alternative procedures to verify the existence of accounts receivable, as positive confirmations are direct requests for information from debtors and lack of response raises questions about the receivable's existence. Negative confirmations, concerns about collectibility, or pledging do not directly relate to the existence verification process in the same way.

An Auditor Should Perform Alternative Procedures to Substantiate the Existence