The auditor obtains corroborating audit evidence for accounts receivable by using positive or negative confirmation requests.Under which of the following circumstances might the negative form of the accounts receivable confirmation be useful?
A)A substantial number of accounts are in dispute.
B)Internal control over accounts receivable is ineffective.
C)Client records include a large number of relatively small balances.
D)The auditor believes that recipients of the requests are unlikely to give them consideration.

Question

Quizplus · Accepted Answer

Negative confirmation requests are useful when client records include a large number of relatively small balances, as it is efficient and cost-effective in such scenarios. Negative confirmations ask recipients to respond only if they disagree with the information provided, making them suitable for situations where errors are expected to be minimal.

The Auditor Obtains Corroborating Audit Evidence for Accounts Receivable by Using