After the CPAs have selected particular accounts receivable for confirmation:
A) As a control measure, the CPAs should carefully list the audited values of all of those accounts before turning the letters over to the client to type and mail.
B) It is important that every account selected that has a material balance ultimately be verified by confirmation or the application of alternative procedures; immaterial balances never require any follow-up through alternative procedures.
C) All requests for confirmation should be mailed in envelopes bearing the CPA firm's return address and should include a return envelope addressed to the CPA firm.
D) All differences between confirmation replies and book values should be reconciled by the CPAs, rather than the client.

Question

Quizplus · Accepted Answer

Including the CPA firm's return address and a return envelope addressed to the CPA firm ensures that the confirmation requests are more likely to be returned directly to the CPAs, rather than being intercepted or mishandled by the client or by third parties. This helps to ensure the reliability and independence of the confirmation process. Choices A, B, and D are incorrect because they do not accurately reflect best practices for handling confirmation requests or addressing discrepancies. Specifically, it is not necessary to list audited values of accounts or reconcile all differences between confirmation replies and book values. Additionally, immaterial balances may still require follow-up through alternative procedures if there is reason to suspect errors or irregularities.

After the CPAs Have Selected Particular Accounts Receivable for Confirmation