Which of the following most likely would be included with the client’s confirmation letter, when an auditor decided to confirm customers’ account balances rather than individual invoices.? Select one: Question 28Answer a. A client-prepared letter reminding the customerthat a nonresponse will cause a second request tobe sent. b. An auditor-prepared letter explaining that a nonresponse may cause an inference that the accountbalance is correct. c. An auditor-prepared letter requesting the customer to supply missing and incorrect informationdirectly to the auditor. d. A client-prepared statement of account showingthe details of the customer’s account balance.

Which of the following most likely would be included with the client’s confirmation letter, when an auditor decided to confirm customers’ account balances rather than individual invoices.? Select one: Question 28Answer a. A client-prepared letter reminding the customerthat a nonresponse will cause a second request tobe sent. b. An auditor-prepared letter explaining that a nonresponse may cause an inference that the accountbalance is correct. c. An auditor-prepared letter requesting the customer to supply missing and incorrect informationdirectly to the auditor. d. A client-prepared statement of account showingthe details of the customer’s account balance.

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

Chapter4: Professional Legal Liability

Section: Chapter Questions

Problem 12CYBK

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Similar questions

Which of the following most likely would be included with the client’s confirmation letter, when an auditor decided to confirm customers’ account balances rather than individual invoices.? Select one: a. An auditor-prepared letter requesting the customer to supply missing and incorrect information directly to the auditor. b. A client-prepared letter reminding the customer that a nonresponse will cause a second request to be sent. c. A client-prepared statement of account showing the details of the customer’s account balance. d. An auditor-prepared letter explaining that a nonresponse may cause an inference that the account balance is correct.
When an audit team does not receive a response on a positive accounts receivable confirmation, auditors should do all of the following excepta. Send a second request.b. Do nothing for immaterial balances.c. Examine shipping documents.d. Examine client correspondence files.
To gather audit evidence related to accounts receivable, the client should mail the confirmation requests. TRUE OR FALSE? WHY?
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
An auditor tested the client's internal controls over granting customers credit and establishing customers' credit limits. This test is relevant to the assertion of Valuation for accounts receivable. Question 47 options: True False
Which of the following is correct regarding the use of confirmation letters in an audit of financial statements: a. Blank confirmation letters are usually preferred when the auditor expects an overstatement error in the account balance. b. A reply from a receivable confirmation letter received from the customer through the client is considered an invalid reply, thus another set of confirmation letter should be sent. c. A positive confirmation letter is preferred over a negative confirmation letter when the auditor, based on his past experience with the client, expects minimal to zero errors. d. When an auditor does not receive a reply from a customer for a negative confirmation letter in a considerable period of time, the auditor should send out another set of confirmation letter.
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
Explain why it is common for auditors to send confirmationrequests to vendors with “zero balances” on the client’s accounts payable listing butuncommon to follow the same approach in verifying accounts receivable
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Which of the following would provide an auditor with the most reliable evidence reguarding the existence of accounts receivable? A. A copy of the invoice sent to the customer. B. Acopy of the customer's sales order held by the client. C. An accounts receivable confirmation received by the auditor from the client's customer. D. An aging schedule showing the composition of the year-end-accounts receivable balance.
AUDITING Answer the following questions and explain the correct answers per item. Also explain why the other choices are incorrect 1. An accountant agrees to the client's request to change an engagement from a review to a compilation of financial statements. The compilation report should include: A. No reference to the original engagement. B. Reference to a departure from PSAs. C. Scope limitations that may have resulted in the change of engagement. D. Information about review procedures already performed. 2. The Philippine Framework for Assurance Engagements identifies two types of assurance engagements a practitioner is permitted to perform: a reasonable assurance engagement and a limited assurance engagement. Which of the following is the objective of a limited assurance engagement? A. A reduction in assurance engagement risk to a very low level in the circumstances of the engagement as a basis for a disclaimer of the practitioner's conclusion. B. A reduction in assurance engagement…
Which of the following is NOT an example of externally generated evidence sent directly to the auditor? O supplier invoices O bank confirmations O payable confirmations responses to legal letters