12/15/21, 7:58 PM Audit 16.

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Audit 16.4 Study

Audit 16.4
Terms in this set (34)

1) Which of the following is the C) Conclusions drawn from receiving no reply may
principle "weakness" of using not be correct.
negative confirmations for the
tests of details of balances for
accounts receivable?

2) Communication addressed D) positive confirmation.

to the debtor requesting him or
her to confirm whether the
balance as stated on the
communication is correct or
incorrect is a

3) A type of positive A) requests the recipient to fill in the amount of the

confirmation known as a blank balance.
confirmation

4) The most effective audit C) confirmation of accounts receivable.

evidence gathered for
accounts receivable is the

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12/15/21, 7:58 PM Audit 16.4 Flashcards | Quizlet

Audit 16.4procedure that

5) The audit A) confirmations. Study

provides the auditor with the

most appropriate evidence
when performing test of details
of balances for accounts
receivable is

6) When should auditors not B) when customers do not return negative

perform alternative confirmation requests
procedures in testing the
accounts receivable balance?

7) A positive confirmation is D) follow-up procedures are performed if a

more reliable evidence than a response is not received from the debtor.
negative confirmation because

8) When positive confirmations A) Send a second confirmation request.

are used, auditing standards
require alternative procedures
for confirmations not returned
by the customer. Which of the
following would not be
considered an alternative
procedure?

9) The positive (as opposed to B) there is reason to believe that a substantial

the negative) form of number of accounts may be in dispute.
receivables confirmation may
be preferred when

10) An auditor should perform A) no reply to a positive confirmation request is

alternative procedures to received.
substantiate the existence of
accounts receivable when

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12/15/21, 7:58 PM Audit 16.4 Flashcards | Quizlet

Audit 16.4... ... Study

11) Confirmation of accounts C) existence of the balances.

receivable balances normally
provides evidence concerning
the

12) If the auditor decides not to C) document the reasons for such a decision in the
confirm accounts receivable audit files.
that are material, the auditor
should

13) The most reliable evidence A) as close to the balance sheet date as possible.
from confirmations is obtained
when they are sent

14) A type of positive A) invoice

confirmation in which an
individual invoice is confirmed,
rather than the customer's
entire accounts receivable
balance is the ________
confirmation.

15) Confirmation of accounts A) existence

receivable provide evidence
related to the ________ objectives.

16) When determining the B) if accounts receivable are confirmed before

timing of the accounts year-end, the auditor typically prepares a roll-
receivable confirmations, forward schedule.

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Audit 16.4
17) When making the sampling A) it is important to sample some items for every
Study

decisions for accounts material segment of the population.

receivable confirmations,

27) A confirmation is a type of TRUE

audit evidence$

28) The auditor should perform TRUE

procedures to verify the
addresses used for the
accounts receivable
confirmations.$

29) Both U.S. and international FALSE

auditing standards require the
use of confirmations for
accounts receivable.

30) Blank confirmations are FALSE

considered less reliable than
standard positive
confirmations.

31) Negative confirmations are TRUE

less expensive, and less
reliable, than positive
confirmations.

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12/15/21, 7:58 PM Audit 16.4 Flashcards | Quizlet

Audit
32) It is 16.4
common to use a FALSE Study

combination of positive and

negative confirmations by
sending the latter to accounts
with large balances and the
former to those with small
balances.

... ...

33) If auditors consider TRUE

confirmations of accounts
receivable to be ineffective
evidence because response
rates will be inadequate or
unreliable, they need not
confirm accounts receivable.

34) Negative confirmations TRUE

normally require a larger
sample size than positive
confirmations.

35) When sending TRUE

confirmations during most
audits of accounts receivable,
the emphasis is often on
confirming larger and older
accounts.

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12/15/21, 7:58 PM Audit 16.4 Flashcards | Quizlet

Audit 16.4
36) When a customer disagrees FALSE Study

with the amount shown on an

account receivable
confirmation, the auditor
should not ask the client to
reconcile the difference.

37) Auditors must maintain TRUE

control of confirmations until
they are returned from the
customer$

38) The confirmations must be FALSE

mailed by the auditor, but
should contain the return
address of the client.

... ...

39) Stratification of accounts TRUE

receivable is desirable when
using confirmations.

40) Each client misstatement in TRUE

accounts receivable must be
analyzed to determine whether
it was consistent with the
original assessed level of
control risk.

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