When positive confirmations are used, ASA 505 requires follow-up procedures for confirmations not returned by the customer.In such a situation, which of the following would NOT be classified as an alternative procedure?
A) Send a second confirmation request.
B) Examine subsequent cash receipts to determine if the receivable has been paid.
C) Examine the customer's purchase order and the duplicate sales invoice to determine if the merchandise was ordered.
D) Examine shipping documents to verify that the merchandise was shipped.

Question

Quizplus · Accepted Answer

Sending a second confirmation request is not considered an alternative procedure for non-returned confirmations under ASA 505. Alternative procedures typically involve examining other evidence to validate the account balance, such as subsequent cash receipts, sales documentation, or shipping documents.

When Positive Confirmations Are Used, ASA 505 Requires Follow-Up Procedures