Briefly describe the circumstances in which it is acceptable to use negative confirmation requests.

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Briefly describe the circumstances in which it is acceptable to use negative confirmation requests.


Answer:

It is acceptable to use negative confirmation requests only when all of the following circumstances are present:
• Accounts receivable is made up of a large number of small accounts.
• Combined assessed control risk and inherent risk is low.
• There is no reason to believe that the recipients of the confirmations are unlikely to give them consideration.

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