Negative confirmations of accounts receivable is less effective than positive confirmations of accounts receivable because
A) a majority of recipients usually lack the willingness to respond objectively.
B) some recipients may report incorrect balances that require extensive follow-up.
C) the auditor cannot infer that all nonrespondents have verified their account information.
D) negative confirmations do not produce evidential matter that is statistically quantifiable.

Question

Quizplus · Accepted Answer

Negative confirmations cannot provide evidence that non-respondents have verified their account information. This limits their effectiveness compared to positive confirmations, which require recipients to verify the accuracy of their balances. Additionally, non-response rates for negative confirmations tend to be higher, further limiting their effectiveness.

Negative Confirmations of Accounts Receivable Is Less Effective Than Positive