How does the auditor gather evidence using the confirmation process?
A)The client selects a sample of customer balances from the year-end accounts receivable subsidiary ledger
B)Each of the customers selected for confirmation will be sent a letter asking him to confirm the balance that he is owed by the audit client at year-end
C)The auditor can choose to send either positive or negative confirmations
D)Positive confirmations request the customer to return the confirmation directly to management if the balance is correct or incorrect
E)Negative confirmations request the customer to return the confirmation directly to the auditor only if the balance is incorrect
F)Both A and B
G)Both B and C
H)Both C and E

Question

Quizplus · Accepted Answer

The auditor can gather evidence using the confirmation process by choosing to send either positive or negative confirmations to selected customers from the year-end accounts receivable subsidiary ledger. Positive confirmations ask the customer to confirm the balance directly to management if it is correct or incorrect, while negative confirmations ask the customer to confirm the balance directly to the auditor only if it is incorrect. This allows the auditor to gather reliable evidence about the accuracy and completeness of the accounts receivable balance.

How Does the Auditor Gather Evidence Using the Confirmation Process