Accounting Multiple Choice Question – 26 September 2026

The following statement applies to the use of the positive or negative method of direct confirmation of receivables.

For this statement, select whether it applies to a situation where the positive method should be used, to a situation where the negative method could be used, it depends on the size of the business, or it should be referred to a more senior auditor.

• The assessed risk of material misstatement is high.

Select ONE answer:

1. Positive method
2. Negative method
3. Consult a senior colleague
4. Depends on the size of the business

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – The negative method of direct confirmation of receivables (i.e., only receiving responses by exception) could be used when a substantial number of misstatements is not expected and there is no need to believe that respondents will disregard these requests. In other circumstances the positive method should be used.
2. Not correct
3. Not correct
4. Not correct

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