A positive confirmation is more reliable evidence than a negative confirmation because:
A) fewer confirmations can be sent out.
B) the debtor's lack of response indicates agreement with the stated balance.
C) the auditor has a document which can be used in court.
D) follow-up procedures can be performed if a response is not received from the debtor.

Question

Quizplus · Accepted Answer

A positive confirmation, where the debtor confirms the stated balance, provides direct evidence of the correctness of the account balance, while a negative confirmation only provides indirect evidence since it is possible that the debtor did not respond due to errors, misunderstandings or fraud. However, if no response is received to a positive confirmation, the auditor can perform follow-up procedures such as obtaining additional confirmations, performing alternative procedures or conducting discussions with management, which enhances the reliability of the evidence obtained.

A Positive Confirmation Is More Reliable Evidence Than a Negative