In auditing accounts receivable, the negative form of confirmation request most likely would be used when:

Question

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Choice "D" is correct. Negative confirmations are most likely to be used when the assessed level of audit risk, including inherent and control risk, is low. Choice "A" is incorrect. If the total amount of accounts receivable is immaterial, the auditor is not likely to send any confirmations. Choice "B" is incorrect. If prior year response rates were low, negative confirmations would not be used since the auditor would be concerned that the negative confirmations would not receive adequate attention from the recipients. Choice "C" is incorrect. An auditor would need to feel comfortable that the confirmations would receive adequate attention from the recipients before deciding to send negative confirmations.

In Auditing Accounts Receivable, the Negative Form of Confirmation Request