An auditor should perform alternative procedures to substantiate the existence of accounts receivable when
A)no reply to a positive confirmation request is received.
B)no reply to a negative confirmation request is received.
C)collectability of the accounts receivable is in doubt.
D)pledging of the accounts receivable is probable.

Question

Quizplus · Accepted Answer

When no reply is received to a positive confirmation request, it indicates that the auditor needs additional evidence to verify the existence of the accounts receivable. Alternative procedures are performed to gather this evidence. Positive confirmations are direct requests to confirm the balance owed, and a lack of response raises questions about the receivable's existence.

An Auditor Should Perform Alternative Procedures to Substantiate the Existence