“Testing Methods”
Please respond to the following:
- According to the text, to minimize the risk of material misstatement, auditors seek third- party verification of account balances by mailing customers their statements. Discuss the advantages of positive and negative confirmations, and ascertain whether or not email and oral confirmations are acceptable to increase customer response rates. Support your position.
- Discuss the difference between substantive test of transactions and substantive test of balances, and identify at least two (2) situations when an auditor should test account balances. Support your rationale with related examples of such circumstances.
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Part A
It is a fact that a positive confirmation is type of communication that is addressed to all debtors requesting receipt for confirmation whether the balance stated on the request is correct or not. One advantage of having positive confirmation is that the auditor can easily perform any follow-up procedures in case there is no response………….
APA
530 Words
