Negative confirmation of accounts receivable is less effective than positive confirmation of accounts receivable because:

Question

Quizplus · Accepted Answer

Choice "C" is correct. Negative confirmation of accounts receivable is less effective than positive confirmation of accounts receivable because the auditor cannot infer that all nonrespondents have verified their account information. Choice "A" is incorrect. Both positive and negative confirmations are equally affected by recipients' lack of willingness to respond objectively. Choice "B" is incorrect. Both positive and negative confirms are equally affected by recipients' reporting of incorrect balances. Choice "D" is incorrect. Negative confirmations returned do produce information (e.g., errors noted in accounts) that can be statistically quantifiable.

Negative Confirmation of Accounts Receivable Is Less Effective Than Positive