Question

After receiving responses to accounts receivable confirmations, the auditor determined that the evidence was not sufficient...

After receiving responses to accounts receivable confirmations, the auditor determined that the evidence was not sufficient to form a conclusion regarding the accounts receivable balance. Which of the following actions should the auditor take next concerning the accounts receivable balance?

a. Issue a qualified audit opinion on the client’s financial statements.

b. Withdraw from the engagement and issue a disclaimer of opinion.

c, Ask the internal auditor to evaluate the valuation of accounts receivable.

d. Request additional confirmations and perform alternative procedures.

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Answer #1

Ans is

d. Request additional confirmations and perform alternative procedures.

Reason:-

Options A and B are not possible because the evidences are not adverse. Rather the auditor thinks they are not sufficient. Insufficiency is not the same as the non-availability of evidence.

Option C is not correct because the internal auditor valuation report cannot be used because it does not certify the balances. It only certifies the risks in internal controls.

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