Statements regarding audit of negotiable notes receivable

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Reference no: EM131267710

The confirmation of the client's trade accounts receivable as a means of obtaining audit evidence is ordinarily considered to be a:

1. basic principle of attestation.

2. substantive procedure.

3. required observation technique.

4. test of a control.

Which of the following statements regarding the audit of negotiable notes receivable is correct?

1. Notes receivable discounted with recourse need not be confirmed.

2. Confirmation in writing from the holder of the note is considered an acceptable alternative to inspection.

3. Notes receivable discounted without recourse are confirmed via the standard form for confirmation of deposits and loans at financial institutions used in the audit of cash.

4. Physical inspection of a note by the auditors provides conclusive evidence.

Reference no: EM131267710

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