Question

Confirmations, especially for testing accounts receivable, are a major substantive procedure. Identify and describe the 3 types of confirmations. Be sure to indicate when (i.e., under what conditions) each type is most appropriate.

Answer 1

Solution:-

we had 3 types of confirmation for the testing Accounts receivable are:-

1.The positive confirmation:-

It is most suitable to utilize when the interior control of the Auditee is powerless. Here, the gathering to whom such affirmation is sent, answers independent of the reality whether the concerned Account balance counts or not.

2.Negative Confirmation:-

It is most suitable to utilize when the inner control of the Auditee is solid. Here, the gathering to whom such affirmation is sent, answers just when the concerned Account balance does not count.

3.Blank Confirmation:-

It is most suitable to utilize when the Auditee imparts a decent compatibility to the gathering to whom the affirmation is planned to be sent. Here, the gathering to whom such affirmation is sent, answers with the equalization in the concerned Account in its books.