In confirming a client's accounts receivable in prior years, an auditor discovered many differences between recorded account balances and confirmation replies. These differences were resolved and were not misstatements. In defining the sampling unit for the current year's audit, the auditor most likely would choose:
A)customers with credit balances.
B)small account balances.
C)individual overdue balances.
D)individual invoices.

Question

Quizplus · Accepted Answer

Given the history of differences that were eventually resolved without indicating misstatements, the auditor is likely to focus on a detailed level of testing to better understand the nature of these differences. Choosing individual invoices as the sampling unit allows for a more granular examination of accounts receivable, facilitating the identification and resolution of any discrepancies.

In Confirming a Client's Accounts Receivable in Prior Years, an Auditor