Discuss the relationship of confirmation procedures to the auditor's assessment of audit risk. Discuss certain factors...
Discuss the relationship of confirmation procedures to the auditor's assessment of audit risk. Discuss certain factors that affect the reliability of confirmations
Homework Answers
Confirmation procedures are one of the audit procedures which are used by the auditors to confirm 3rd party balances like Debtors and Creditors. Confirmation can be of 2 types- Positive and Negative.
In positive confirmation the auditor ask the 3rd party to tell the account balance while in negative confirmation,the auditor quotes a balance and ask the party whether the balance is correct or not and the party need to reply in YES OR NO.
Various Factors which affect the reliability of confirmation are-
1. Influence of the promoters and the directors of the audited firm on the 3rd party.
2. Type of confirmation been taken. As negative confirmation tells us whether the amount is correct or not but it will not help to certain the exact amount.
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Discuss the relationship of confirmation procedures to the
auditor's assessment of audit risk. Discuss certain factors...
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