1.
Explain what type of audit report is used when The entity would not allow the CPA to confirm
any of the accounts receivable. All other procedures were performed as considered necessary and
no other issues were encountered, but the CPA was unable to satisfy themselves with regard to
the balance in accounts receivable. Assume that the accounts receivable comprised 40% of the
total assets of the entity?
Solution
When an auditor of financial statements does not confirm material accounts receivable, but is
satisfied by the application of alternative auditing procedures, she normally should:
issue an unqualified opinion with no reference to this omission but be prepared to defend
the action.