The auditors obtain audit evidence for accounts receivable by using positive or negative confirmation requests.Under which of the following circumstances might the negative form of the accounts receivable confirmation be useful?
A)A substantial number of accounts are in disputes.
B)The combination of inherent risk and control risk is high.
C)A low exception rate is expected.
D)The auditors believe that recipients of the requests are unlikely to give them consideration.

Question

Quizplus · Accepted Answer

Negative confirmation requests are useful when a low exception rate is expected because they are less effective at detecting misstatements. Negative confirmations ask recipients to respond only if they disagree with the information provided, so they are most useful when errors are believed to be minimal.

The Auditors Obtain Audit Evidence for Accounts Receivable by Using