When evaluating the risk of material misstatement with regards to defalcations involving receivables (a credit entry to accounts receivable for amounts not received), the auditor would expect an experienced bookkeeper to most likely
Debit which of the following accounts?
A) Cash.
B) Sales returns.
C) Miscellaneous income.
D) Accounts payable.

Question

Quizplus · Accepted Answer

An experienced bookkeeper might debit Sales returns to conceal the defalcation, as it would reduce accounts receivable without raising immediate suspicion.

When Evaluating the Risk of Material Misstatement with Regards to Defalcations