The auditing standards presume that the auditor will request confirmation of accounts receivable balances unless
A)the transactions in accounts receivable are immaterial
B)the use of confirmations would be effective if the amount were significant
C)the auditor can reduce the risk of issuing the wrong audit opinion to an acceptable low level without confirming accounts receivable
D)the client believes that confirmations are not necessary

Question

Quizplus · Accepted Answer

The auditing standards presume that the auditor should request confirmation of accounts receivable balances unless the auditor can reduce the risk of issuing the wrong audit opinion to an acceptable low level without confirming accounts receivable. Choice A is incorrect because materiality is not the only determining factor for requesting confirmation. Choice B is incorrect because effectiveness is not the only determining factor for requesting confirmation. Choice D is incorrect because the belief of the client is not a valid reason to forego confirmation.

The Auditing Standards Presume That the Auditor Will Request Confirmation