For which of the following accounts receivable customer populations would the use of negative confirmations be most appropriate?
A)A retail truck and trailer sales company with high inherent risk and moderate control risk over the revenue cycle.
B)A utility company with control risk over the revenue cycle assessed high.
C)A mortgage banking company with control risk over the purchasing cycle assessed low.
D)A cable company with control risk over the revenue cycle assessed low

Question

Quizplus · Accepted Answer

Negative confirmations are most appropriate when control risk is assessed as low, as this implies that the internal controls are strong and reliable. Therefore, option D, a cable company with control risk over the revenue cycle assessed low, is the most appropriate choice. Options A, B, and C all have either high inherent risk or high control risk, which would make negative confirmations less appropriate.

For Which of the Following Accounts Receivable Customer Populations Would