ACCA Audit and Assurance (F8) Practice Exam

Which of the following is considered an alternative procedure for receivable confirmation?

1. Perform customer confirmations

2. Review cash receipts post cut-off date

3. Make inquiries about unpaid invoices

4. Obtain detailed aging reports

The correct answer is: Review cash receipts post cut-off date

When considering alternative procedures for receivable confirmation, reviewing cash receipts that occur after the cut-off date is particularly valuable. This approach provides evidence regarding the collectibility of receivables, as it directly indicates whether customers are fulfilling their payment obligations. If cash receipts for specific receivables are observed after the balance sheet date, it strengthens the assertion that those receivables were valid and collectible as of the reporting date. This procedure helps the auditor evaluate the reasonableness of the reported receivables balance by confirming actual cash inflows. Other options, while related to the assessment of receivables, do not specifically serve as confirmation alternatives. Performing customer confirmations involves directly asking customers to confirm their balances, which is the primary method for confirming receivables rather than an alternative. Inquiries about unpaid invoices can provide context but do not offer direct evidence of collection. Obtaining detailed aging reports helps assess the status of receivables but does not provide direct evidence of cash receipts or collectibility in the same way reviewing cash receipts does.