Auditors may use positive and/or negative forms of confirmation requests for accounts receivable.Of the following,which combination is it most likely that the auditors will use?
A)The positive form for small balances,and the negative form for large balances.
B)The positive form used for large balances and the negative form for the small balances.
C)The positive form used for trade receivables and the negative form for other receivables.
D)The positive form when controls related to receivables are satisfactory,and the negative form when controls related to receivables are unsatisfactory.

Question

Quizplus · Accepted Answer

Auditors are more likely to use the positive form of confirmation for large balances because it requires a direct response from the recipient, ensuring a higher level of assurance. For small balances, the negative form, which only requires a response if the information is incorrect, may be used as it is more cost-effective and efficient while still providing reasonable assurance.

Auditors May Use Positive And/or Negative Forms of Confirmation Requests