Your Ask Joey ™ Answer

Is the audit team required to send accounts receivable confirmations?

Yes, for most firms, the audit team is required send confirmations to customers to confirm their outstanding balance at year-end. If the audit team determines that sending confirmations is a waste of time, they can perform alternative procedures, but that typically results in extensive documentation.

The primary reason is to test the existence & occurrence assertion. The audit must decide on what type of accounts receivable confirmation to send.

The three types that can be sent include positive, negative, or blank confirmations.


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