ACCA Audit and Assurance (F8) Practice Exam

How many types of positive confirmations are recognized?

1. One

2. Two

3. Three

4. Four

The correct answer is: Two

The correct answer identifies that there are two types of positive confirmations recognized in auditing. Positive confirmations are used by auditors to obtain assurance about the accuracy of account balances and transactions directly from the third party, typically a customer or vendor. The two types of positive confirmations are: 1. **Positive Confirmation - Request for a Response**: In this type, the auditor explicitly requests the respondent (for example, the debtor) to reply directly, confirming the accuracy of the information provided. This can be particularly effective as it prompts the recipient to check the accuracy of the information before responding. 2. **Positive Confirmation - No Response Required**: This type requests the recipient to respond if they disagree with the provided information. If no response is received, the confirmation is considered a validation of the information as accurate. This type can serve a similar purpose but slightly modifies how the auditor interprets non-responses. Utilizing these two types of confirmations enables auditors to tailor their approach based on the specific circumstances of the audit and the assessed risks. This essential understanding plays a vital role in effective audit planning and execution, particularly in verifying account balances and enhancing audit reliability.