Question

An auditor decides to send out external confirmations to test the accounts receivable balance. Out of...

An auditor decides to send out external confirmations to test the accounts receivable balance. Out of 50 confirmation letters that are sent out, the auditor does not receive responses from 4 of those letters. Describe what the auditor should do in this case.

Please answer the question completely. Thank you v much.

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Answer #1

External confirmation is the process of obtaining and evaluating audit evidance throgh a representation of infomation or an existing condition directly from a third party in response to a request for information about a particular item affecting assertaining in the financial statement or related disclosures.

If the initial response to a confirmation is not received,the auditor should: 1.Send a second request. 2.Consider sending a third request or telephoning the customer.

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