Question

Which of the following are factors to consider when designing accounts receivable (A/R) confirmation requests?

I. Method of communication (i.e. paper or electronic).

II. Management’s authorization to the confirming parties to respond to the auditor.

III. Amount of total sales by customer for the period.

IV. The aging of A/R balances to be confirmed.

A. I and II

B. I and IV

C. II and III

D. III and IV

Answer 1

Factors to consider when designing accounts receivable (A/R) confirmation requests include the method of communication, management's authorization, and the aging of A/R balances and amount of total sales.

Step-by-step explanation:

When designing accounts receivable (A/R) confirmation requests, there are several factors to consider. First, the method of communication, such as whether to use paper or electronic format, is important. Second, management's authorization to the confirming parties to respond to the auditor is crucial for the accuracy of the responses. Finally, the aging of A/R balances to be confirmed and the amount of total sales by customer for the period are also factors that need to be taken into account.