Question

Which of the following strategies most likely could improve the response rate of the confirmation of accounts receivable?

1) Including a monthly statement of the customer's account with the confirmation.
2) Restricting the selection of accounts to be confirmed to those customers with relatively large balances.
3) Requesting customers to respond to the confirmation requests directly to the auditor by fax or e-mail.
4) Notifying the recipients that second requests will be mailed if they fail to respond in a timely manner.

Answer 1

To improve the response rate of accounts receivable confirmations, include a monthly statement with the confirmation, request responses directly to the auditor, and notify recipients of potential follow-up requests.

Step-by-step explanation:

The strategy most likely to improve the response rate of the confirmation of accounts receivable is including a monthly statement of the customer's account with the confirmation. This can be effective because it provides the customer with a clear and immediate overview of their account status, which may prompt a quicker response. Additionally, requesting customers to respond to the confirmation requests directly to the auditor by fax or e-mail could be advantageous as it simplifies the process for the customer and may accelerate the receipt of confirmations. Lastly, notifying the recipients that second requests will be mailed if they fail to respond in a timely manner can also create a sense of urgency and increase response rates.