The primary consideration when planning whether to send confirmations of accounts receivable before the balance sheet date is the:
A)type of confirmation to be used.
B)client's internal control over transactions affecting receivables.
C)availability of staff auditors.
D)number of customer accounts.

Question

Quizplus · Accepted Answer

The client's internal control over transactions affecting receivables is the primary consideration when planning whether to send confirmations of accounts receivable before the balance sheet date. This is because the strength of the client's internal control will affect the reliability of confirmation responses received from customers. If the client's internal control is strong, confirmation responses are more likely to be reliable and therefore may not need to be sent before the balance sheet date. If the client's internal control is weak, confirmation responses may be less reliable and therefore may need to be sent before the balance sheet date to obtain sufficient appropriate evidence. Factors such as the type of confirmation to be used, availability of staff auditors, and number of customer accounts are important considerations but are not as significant as the client's internal control.

The Primary Consideration When Planning Whether to Send Confirmations of Accounts