Videos
Which type of confirmation is most reliable?
What are some instances where an auditor would choose blank confirmations?
What’s the difference between positive, negative, and blank confirmations?
MCQ-02399 (35): According to Becker negative forms of confirmation requests are most likely to be used when the combined assessed level of inherent risk and control risk relative to AR is low. Choice B explanation shows as incorrect as the auditor would need to feel comfortable that the confirmations would receive adequate attestation from the recipients before deciding to send negative confirmations.
Where as in MCQ-02780 it says the complete opposite...
MCQ-02780 (36): According to Becker, If recipients of confirmations are likely to sign them without devoting proper attention to them, it is possible that a misstatement in the related receivable will not be discovered by the auditor... Choice A explanation says that in low risk situations it would be acceptable to use positive confirms (blank confirms may provide a greater degree of assurance, which would be more important in high risk situations?
Am I missing something here?!