Which one of the following circumstances would indicate that negative confirmations should NOT be used on this engagement?
A) A significant portion of the total accounts receivable is represented by a small number of accounts with large balances.
B) The internal control over receivables is good.
C) The recipients are mostly businesses rather than individuals.
D) The auditor is unaware of disputed or inaccurate accounts.

Question

Quizplus · Accepted Answer

Negative confirmations are less effective when a significant portion of the total accounts receivable is represented by a small number of accounts with large balances, as these accounts require more assurance and positive confirmations would be more appropriate.

Which One of the Following Circumstances Would Indicate That Negative