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

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

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter2: Audits Of High-risk Accounts

Section2.6: Cbi Holding Company, Inc.

Problem 2Q

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Explain why it is common for auditors to send confirmation
requests to vendors with “zero balances” on the client’s accounts payable listing but
uncommon to follow the same approach in verifying accounts receivable

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During the confirmation of accounts receivable, an auditor receives a confirmation via the client’s fax machine. Which of the following actions should the auditor take?a. Not accept the confirmation and select another customer’s balance to confirm.b. Not accept the confirmation and treat it as an exception.c. Accept the confirmation and file it in the working papers.d. Accept the confirmation but verify the source and content through a telephone call to the respondent.
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.
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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
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