Auditing standards require the confirmation of accounts receivable in normal circumstances. What are the three exceptions to this requirement?

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Auditing standards require the confirmation of accounts receivable in normal circumstances. What are the three exceptions to this requirement?

Answer:

The three exceptions are:

1.  Accounts receivable are immaterial.
2.  The auditor considers confirmations ineffective evidence because response rates will likely be inadequate or unreliable.
3.  The combined level of inherent risk and control risk is low and other substantive evidence can be accumulated to provide sufficient evidence.

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