Question

Confirmation is least likely to be a relevant form of evidence with regard to assertions about accounts receivable when the auditor has concerns about the receivables':

A) valuation.
B) classification.
C) existence.
D) completeness.

Answer 1

The correct option is C). Confirmation is least relevant for assertions about the existence of accounts receivable as it can't verify the actual existence of what may be falsified receivables, while it can help with valuation, classification, or completeness to some extent.

Step-by-step explanation:

Confirmation as a form of evidence is least likely to be relevant to assertions about accounts receivable when there are concerns about the receivables' existence. This is because confirmation is more directly related to verifying that debts acknowledged by debtors are accurate and that they agree to the terms and amounts recorded by the company. It is less effective at asserting whether the receivables actually exist; there may be instances where receivables could be falsified and hence confirming them would not be relevant. Concerns regarding valuation, classification, or completeness of accounts receivable could potentially be addressed through confirmation procedures to some extent, as they involve checking the accuracy and appropriateness of the receivable records themselves.