What is Confirmation of accounts receivable?
In short
Auditors are presumed to confirm accounts receivable unless they are immaterial, confirmation would be ineffective, or the assessed risk is low and other substantive procedures address it.
Key takeaways
- An auditor who doesn't confirm documents why.
- Confirmations mainly support existence, not valuation or completeness.
- The auditor controls sending and receiving the requests.
Where it's tested
AUD: Evidence: Types & Procedures — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Which condition would make the use of negative accounts receivable confirmations INAPPROPRIATE?