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Positive Confirmations Case Study

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The junior acted appropriately by sending out positive confirmations, but he allowed the client to mail them out. Positive confirmations should have individuals with A/R balances replying regardless of the accuracy of the amount. While it may be optimistic to expect all confirmations to return, some should be returned. It is likely that the client did not mail out the confirmations. • Junior should send out external confirmations to verify balances himself, and should not allow the chain of custody to involve the client. • No returned confirmations do not verify that A/R is correctly stated, as non-responses are not evidence. Employees get a small base salary and a larger sales bonus. There is a new commission structure and revenue has increased.

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