When an auditor tests to determine if all existing accounts receivable are included in the aged trial balance,
A) they cannot rely on the self-balancing nature of the accounts receivable master file.
B) if all sales to a customer are omitted from the sales journal, it is easy to uncover the understatement of accounts receivable by tests of details of balances.
C) auditors rarely send accounts receivable confirmations to customers with zero balances.
D) unrecorded sales to a new customer are easy to identify for confirmation because that customer is included in the accounts receivable master file.

Question

Quizplus · Accepted Answer

Auditors typically focus their efforts on confirming accounts with balances, as these provide evidence of amounts owed to the company. Confirming accounts with zero balances is less common because they do not directly impact the financial statements' accuracy regarding amounts receivable.

When an Auditor Tests to Determine If All Existing Accounts