The primary purpose of accounts receivable confirmation is to satisfy the:
A) accuracy and cutoff objectives.
B) existence objective.
C) existence and cutoff objectives.
D) existence, accuracy, and cutoff objectives.

Question

Quizplus · Accepted Answer

Accounts receivable confirmation typically aims to satisfy the objectives of existence, accuracy, and cutoff. Existence refers to ensuring that the listed customers actually owe the company money, while accuracy focuses on verifying the balance due. Cutoff, meanwhile, involves confirming that the balances are recorded in the correct period. By obtaining confirmation from customers, the auditor can gain assurance about all three objectives simultaneously.

The Primary Purpose of Accounts Receivable Confirmation Is to Satisfy