In order to obtain evidence regarding valuation of accounts receivable, the auditor is likely to:
A) send out confirmations to the client's debtors requesting amount owed verification.
B) inquire of management as to the accuracy of sales transactions.
C) examine completed confirmation requests for discrepancies between debtor and client amount.
D) All of the above.

Question

Quizplus · Accepted Answer

To obtain evidence regarding the valuation of accounts receivable, the auditor is likely to use a combination of procedures. Sending out confirmations to the client's debtors is a common method to obtain evidence about the balances owed to the client and to verify the accuracy of the amounts recorded in the client's books. Inquiring of management about the accuracy of sales transactions allows the auditor to gain insights into the client's accounting and internal control systems. Examining completed confirmation requests for discrepancies between debtor and client amounts can help the auditor identify errors or fraud in the client's accounts receivable balances. Therefore, since all of the options are valid methods for obtaining evidence, the best choice is D, all of the above.

In Order to Obtain Evidence Regarding Valuation of Accounts Receivable