To reduce the risks associated with accepting fax responses to requests for conf

Question

To reduce the risks associated with accepting fax responses to requests for confirmations of accounts receivable, an auditor most likely would A. Verify the sources and contents of the faxes in telephone calls to the senders. B. Consider the faxes to be nonresponses and evaluate them as unadjusted differences. C. Inspect the faxes for forgeries or alterations and consider them to be acceptable if none are noted. D. Examine the shipping documents that provide evidence for the existence assertion.

Explanation / Answer

Answer:

  A. Verify the sources and contents of the faxes in telephone calls to the senders.

Explanation to the answer:

At the time of the audit , auditor are generally taking confirmation of the account receivable at the yearend through the various source. If the debtors have given a confirmation through Fax then in such case for reducing the risks associated with accepting fax responses , he should verify the sources and contents of the faxes in telephone calls to the senders.

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