An auditor will be using positive confirmations as part of testing the client’s accounts receivable. In which of the following situations would the use of positive confirmations generally be inappropriate? A.During the prior year’s audit there were several material accounts receivable balances that were in dispute between the customer and the client. B.The majority of the client’s accounts contain small receivable balances. C.The auditor believes that a number of the confirmations returned may contain exceptions. D.Preliminary tests performed indicate that the client’s internal control over accounts receivable is weak.

In auditing, positive confirmations are used to verify the accuracy of accounts receivable. This is…

Answered: An auditor will be using positive…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter9: Auditing The Revenue Cycle.

Section: Chapter Questions

Problem 35RQSC

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Question

An auditor will be using positive confirmations as part of testing the client’s accounts receivable. In which of the following situations would the use of positive confirmations generally be inappropriate?

	A.	During the prior year’s audit there were several material accounts receivable balances that were in dispute between the customer and the client.
	B.	The majority of the client’s accounts contain small receivable balances.
	C.	The auditor believes that a number of the confirmations returned may contain exceptions.
	D.	Preliminary tests performed indicate that the client’s internal control over accounts receivable is weak.