To reduce the risks associated with accepting fax responses to requests for confirmations of accounts receivable, an auditor most likely would:

Question

Quizplus · Accepted Answer

Choice "B" is correct. In order to validate the legitimacy of a faxed confirmation, the auditor is likely to call the senders to verify the sources and contents. Choice "A" is incorrect. Examining shipping documents is an alternative procedure that is more likely to be performed if the confirmation was not received at all. Choice "C" is incorrect. Treating the faxes as non-responses would be to ignore an important source of audit evidence. Treating them as unadjusted differences may cause the auditor to conclude that the accounts receivable balance is misstated, when in fact it is not. Choice "D" is incorrect. Inspecting the faxes for forgeries or alterations is beyond the professional capability of the CPA.

To Reduce the Risks Associated with Accepting Fax Responses to Requests