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CMA Intermediate · Corporate Accounting and Auditing · Audit Sampling, Audit Techniques and Analytical Procedure

Under SA 530, which is given as an example of a suitable alternative procedure when no reply is received to a positive confirmation request for a receivable?

The suitable alternative procedure given in SA 530 is examining subsequent cash receipts together with evidence of their source and the items they are intended to settle, used when no reply has been received to a positive confirmation request.

  1. ARe-sending the request and treating silence as confirmation
  2. BExamining subsequent cash receipts together with evidence of their source and the items they settleCorrect
  3. CWriting off the balance as doubtful
  4. DRelying solely on the management representation letter

Explanation

SA 530 cites examination of subsequent cash receipts, together with evidence of their source and the items they are intended to settle, as a suitable alternative procedure. Treating silence as confirmation or relying only on management representation does not give appropriate evidence.

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