ICAEW ARF · Chapter 8 · Question 4 of 12
A customer does not reply to a positive confirmation request for its year-end balance, even after a follow-up. Which alternative procedure is most appropriate?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Inspect cash received from the customer after the year end and agree it to remittance advices for invoices outstanding at the year end
Explanation
When no reply is received to a positive request, the auditor should perform alternative procedures. Cash received after the year end for specific invoices is strong evidence that the debt existed. A non-reply cannot be treated as agreement, replacing the item would bias the sample, and a confirmation from the client's own staff is internal evidence.
More Audit procedures and substantive testing MCQs
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- Q7Which of the following is correct about a bank confirmation request for audit purposes?
- Q8Which procedure provides the best evidence of the existence of assets recorded in a client's non-current asset register?
- Q9A client's plant and machinery has a cost brought forward of £480,000. Additions in the year cost £60,000 and there were no disposals. The…
- Q10Which of the following is NOT the auditor's responsibility when attending a client's inventory count?