Negative confirmation of accounts receivable is less effective than positive confirmation of accounts receivable because
A) A majority of recipients usually lacks the willingness to respond objectively.
B) Some recipients may report incorrect balances that require extensive follow up.
C) The auditor cannot infer that all nonrespondents have verified their account information.
D) Negative confirmations do not produce evidential matter that is statistically quantifiable.

Question

Quizplus · Accepted Answer

Negative confirmations only provide evidence that the recipient did not object to the stated balance, but do not provide evidence that they actually verified the balance. Therefore, the auditor cannot assume that all non-respondents have verified their account information, as they may not have received or read the request. Positive confirmations, on the other hand, require a response from the recipient and provide more reliable evidence of the accuracy of the account balance.

Negative Confirmation of Accounts Receivable Is Less Effective Than Positive