Question

When positive confirmations are used, auditing standards require alternative procedures for confirmations not returned by the customer. Which of the following would not be considered an alternative procedure?

A) Send a second confirmation request.
B) Examine subsequent cash receipts to determine if the receivable has been paid.
C) Examine shipping documents to verify that the merchandise was shipped.
D) Examine customer's purchase order and the duplicate sales invoice to determine that the merchandise was ordered

Answer 1

Alternative procedures for confirmations that are not returned by the customer are required in auditing. Examining subsequent cash receipts is not considered an alternative procedure.

Step-by-step explanation:

When positive confirmations are used in the auditing process, alternative procedures are required for confirmations that are not returned by the customer. This ensures that the auditor has sufficient evidence to support their findings. In the given options, examining subsequent cash receipts to determine if the receivable has been paid would not be considered an alternative procedure. This is because it does not provide direct evidence of whether the customer received and acknowledged the confirmation request.