In confirming accounts receivable, an auditor decided to confirm customers' account balances rather than individual invoices. Which of the following most likely would be included with the entity's confirmation letter?
A)An auditor-prepared letter explaining that a nonresponse may cause an inference that the account balance is correct.
B)A client-prepared letter reminding the customer that a nonresponse will cause a second request to be sent.
C)An auditor-prepared letter requesting the customer to supply missing and incorrect information directly to the auditor.
D)A client-prepared statement of account showing the details of the customer's account balance.

Question

Quizplus · Accepted Answer

When confirming accounts receivable by confirming customers' account balances, it is common to include a client-prepared statement of account showing the details of the customer's account balance with the confirmation letter. This helps the customer verify the accuracy of the balance being confirmed.

In Confirming Accounts Receivable, an Auditor Decided to Confirm Customers