ACCA Audit and Assurance (F8) Practice Exam

Which of the following is an advantage of positive confirmation with blank?

1. More likely to get a response

2. Reduces false reporting risk

3. Less likely to respond

4. Provides immediate agreement

The correct answer is: Less likely to respond

Positive confirmation with blank, often referred to as blank confirmations or negative confirmations, involves sending a request to the recipient to respond with the information requested, usually without providing the specific amount. This method encourages a response since the recipient must provide the details themselves, enhancing the engagement in the confirmation process. The main advantage of this approach is that it is indeed more likely to elicit a response compared to other methods that may not require direct action from the recipient. When recipients see a blank confirmation notice, they recognize the need to fill in the relevant information, which prompts them to review their records and ensure accuracy. This scenario increases the likelihood that the account balances or transactions will be verified and confirmed by the recipients, thus aiding the auditor in obtaining reliable audit evidence. In terms of the other options, the advantage regarding reduced false reporting risk and providing immediate agreement is not characteristic of blank confirmations. Blank confirmations often require a bit more time as they hinge on the action from the recipients to provide the correct information. Also, one might mistakenly assume that they are less likely to respond, but this methodology encourages just the opposite by necessitating a reply.