The direct receipt of a confirmation from every bank with which the client does business is
A) required by auditing standards for every audit.
B) not necessary unless material fraud is suspected.
C) recommended but not required by auditing standards.
D) necessary for every audit except when there are an unusually large number of active accounts.

Question

Quizplus · Accepted Answer

Auditing standards recommend but do not require the use of bank confirmations. The auditor's decision to confirm a client's bank balance and transactions depends on the auditor's assessment of the risk of material misstatement in the financial statements due to fraud or error. Bank confirmations can provide evidence about the existence, completeness, and valuation of cash and other accounts.

The Direct Receipt of a Confirmation from Every Bank with Which