An auditor should normally perform alternative procedures to substantiate the existence of accounts receivable when
A) No reply to a positive confirmation request is received.
B) No reply to a negative confirmation request is received.
C) Collectability of the receivables is in doubt.
D) Pledging of the receivables is probable.

Question

Quizplus · Accepted Answer

When no reply to a positive confirmation request is received, it casts doubt on the accuracy of the accounts receivable balance. Therefore, alternative procedures should be performed to corroborate the existence of the receivables. This can include examining shipping documents, sales invoices, and other correspondence related to the receivables.

An Auditor Should Normally Perform Alternative Procedures to Substantiate the Existence