The type of receivables confirmation is a major factor affecting sample size, with negative confirmations normally requiring a larger sample than positive confirmations.

Question

Quizplus · Accepted Answer

This statement is true. Negative confirmations provide less reliable evidence than positive confirmations as there is a higher risk that a customer may not respond if there is an error in the account. Therefore, auditors may need a larger sample size to compensate for this increased risk.

The Type of Receivables Confirmation Is a Major Factor Affecting