egarding the confirmation of accounts payable is true? Group of answer choices The confirmation of accounts payable must be done exclusively by the internal audit staff. The confirmation of accounts payable is an important method of establishing the existence of unrecorded accounts payable. The confirmation of accounts payable contributes little or nothing in determining unrecorded accounts payable exist.

egarding the confirmation of accounts payable is true? Group of answer choices The confirmation of accounts payable must be done exclusively by the internal audit staff. The confirmation of accounts payable is an important method of establishing the existence of unrecorded accounts payable. The confirmation of accounts payable contributes little or nothing in determining unrecorded accounts payable exist.

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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Choose the one correct answer. Which of the following statements is invalid relating to confirmation of accounts receivable? a. A negative form of confirmation is preferable to use when individual account balances of customers are relatively smallb. A positive confirmation provides more reliable evidence than the negative confirmation because the auditor can perform follow-up procedures if no response is received from the debtorc. An auditor must consider using the negative form of confirmation when there is reason to believe that there may be a substantial number of accounts in dispute or with inaccuracies or irregularitiesd. In negative confirmation, failure to reply must be regarded as a correct response, even though the debtor may have ignored the confirmation requeste. None of the above
Which of the following statements is invalid relating to confirmation of accounts receivable? a. A negative form of confirmation is preferable to use when individual account balances of customers are relatively smallb. A positive confirmation provides more reliable evidence than the negative confirmation because the auditor can perform follow-up procedures if no response is received from the debtorc. An auditor must consider using the negative form of confirmation when there is reason to believe that there may be a substantial number of accounts in dispute or with inaccuracies or irregularitiesd. In negative confirmation, failure to reply must be regarded as a correct response, even though the debtor may have ignored the confirmation requeste. None of the above
Question 23 Which of the following statements is correct regarding accounts payable and the auditor's procedures? Group of answer choices Because it is generally more difficult to discover a transaction that has not been recorded than to discover one that has been recorded incorrectly, the audit objective of completeness drives many of the substantive procedures applied to these balances. A judgment whether an unrecorded payable should be recorded before the financial statements are prepared depends entirely upon the source of the payable. The confirmation of accounts payable selected from the year-end trial balance of such accounts is most effective in discovering unrecorded liabilities. Unrecorded payables are often discovered through examining vouchers payable entered into the voucher register prior to the balance sheet date.
Which of the following is/are the least persuasive type of audit evidences? 1. Photocopies of sales invoices inspected by the auditor 2. Documents obtained by auditor from third parties directly 3. Bank statements obtained from the client 4. Computations made by the auditor. 1, 3 and 4 only 1 and 3 only 2 only 1 only Which one of the following indicates high degree of detection risk in respect to fl
Confirmation of accounts receivable is a presumptively mandatory audit procedure. In performing this procedure, auditors use positive confirmation requests or negative confirmation requests or a combination of both. Describe three conditions that should exist for the auditors to use the negative form of request.
the auditor is planning to use accounts payable confirmations when auditing the client's accounts payable. The use of accounts payable confirmations will test which of the following assertions? a. rights and obligations b. existence (only) c. existence and completeness d. cutoff
Audit evidence can come in different forms with different degrees of reliability. Which of the following types of evidence is the least reliable?a. Invoices from suppliersb. Bank statements obtained from clientsc. The calculations made by the auditord. Sales invoice unnumbered
Read the case. Then answer the questions based on it. BACKGROUND: Audit standards indicate that there is a presumption that auditors will confirm accounts receivable unless the balance is immaterial, confirmations are deemed ineffective, or the auditors' assessment of risk is low and other procedures will achieve the same objective. However, these instances are considered few and far between and current trends in auditing indicate that there is an expectation that accounts receivable will be confirmed. Auditors may stratify the population, use haphazard or judgmental sampling, and send positive or negative requests. Jenner & Jenner CPAs are the auditors for the Leno Company. In reviewing the accounts receivable aging, the auditors learn that there is a high number of accounts with balances, there are some very large and very small balances, and many customers' balances consist of multiple invoices. 2. How should the auditors mitigate the risk associated with both very large and…
Confirmation of accounts receivable that have been categorized initially by an auditor as "exceptions" most likely could be due to: O Responses that were mailed rather than faxed to the auditor. O Customers who have credit or zero balances with the client. Payments mailed to the client that have not been recorded. O Accounts receivable that have been classified as uncollectable
When the client’s internal control are good, internal documents are more reliable than external True False Whenever practical and reasonable, the confirmation of accounts receivable is required of CPAs. True False Confirmations are ordinarily not used to verify individual transactions such as sales True False Of the three types of confirmations used by auditors, the most reliable type is the positive conformation with the information to be confirmed included on the form. True False Analytical procedures are required during the planning and completion phases on all financial statements audits. True False
Choose the one correct answer Which of the following statements is valid relating to confirmation of accounts receivable? * a. A positive confirmation provides more reliable evidence than the negative confirmation because the auditor can perform follow-up procedures if no response is received from the debtorB. A negative form of confirmation is preferable to use when individual account balances of customers are relatively largec. In positive confirmation, failure to reply must be regarded as a correct response, even though the debtor may have ignored the confirmation requestd. An auditor must consider using the negative form of confirmation when there is reason to believe that there may be a substantial number of accounts in dispute or with inaccuracies or irregularitiese. None of the above
Which of the following is most closely related to the relevance of audit evidence?a. Auditors decide to physically inspect investment securities held by a custodian instead of obtaining confirmations from the custodian.b. In addition to confirmations of accounts receivable, auditors perform an analysis of the aging of accounts receivable to evaluate the collectability of accounts receivable.c. In response to less effective internal control, auditors increase the number of customer accounts receivable confirmations mailed compared to that in the prior year.d. Because of a large number of transactions occurring near year-end, auditors decide to confirm a larger number of receivables following year-end instead of during the interim period.