Which of the following statements about confirming accounts receivable (A/R) and accounts payable (A/P) is true? Question options: A/R confirmations are more likely to include the client's balance than A/P confirmations. A/R and A/P are always confirmed regardless of the materiality of the balance or risks of material misstatement. The assertion with the highest risk of material misstatement for A/R and A/P is Existence. Positive and negative confirmations are always used to audit A/R and A/P.

Confirmations regarding the accounts balances are one of the important elements in determining the…

Answered: Which of the following statements about…

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter9: Auditing The Revenue Cycle

Section: Chapter Questions

Problem 20MCQ

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Which of the following statements about confirming accounts receivable (A/R) and accounts payable (A/P) is true?

Question options:

	A/R confirmations are more likely to include the client's balance than A/P confirmations.
	A/R and A/P are always confirmed regardless of the materiality of the balance or risks of material misstatement.
	The assertion with the highest risk of material misstatement for A/R and A/P is Existence.
	Positive and negative confirmations are always used to audit A/R and A/P.

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