Which of the following circumstances would indicate that positive confirmations should be used on this engagement?
A)A significant portion of the total accounts receivable balance is represented by a small number of accounts with large balances.
B)The internal control over accounts receivable 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

Positive confirmations are typically used when a significant portion of the total accounts receivable balance is represented by a small number of accounts with large balances. This helps ensure that those high-balance accounts are accurate and not overstated.

Which of the Following Circumstances Would Indicate That Positive Confirmations