Planning the engagement
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6. Question ID: CIA 594 1.24 (Topic: D. Determine Engagement Procedures and Prepare Work Program)
Which of the following procedures would provide the most relevant evidence to determine the adequacy of the allowance for doubtful accounts receivable?
A. Test the controls over the write-off of accounts receivable to ensure that management approves all write-offs.
B. Confirmation of the receivables.
C. Analysis of the following month’s payments on the accounts receivable balances outstanding.
D. Analyze the allowance through an aging of receivables and an analysis of current economic data.
My question is i am little confused between option B & D
B:- This mentions about confirming the receivables which is relevant ,also coming from a third party so it is more reliable as compare to internal information from the client. However, confirmation obtained when receivables are due here we are talking about doubtful receivables.
D:- Only apprehension is this is an internal information but quiet relevant
Which one should we choose & why?
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