Comparison of the negative and positive methods, Auditing

Comparison of the Negative and Positive Methods

Negative Method

According to this method of circularisation, the customer is asked to communicate only when he does not agree along with the balance. Effectively the customer is told that whether no reply is obtained from them then the auditor will include that the debtor is in agreement along with all the terms in the circular. The main drawback of this method is that whether the debtor does not obtain the circular, so he will not respond, and this could be misconstrued to mean such the debtor obtained the circular whenever in fact it was never considered and received. From this standpoint, this way is unreliable and should just be used when there is strong internal control.

Positive Method

According to the positive technique, the customer is asked to reply when he agrees the balance or not or is asked to provide the balance himself. This technique is used when there is weak internal control, suspicion of irregularities or items in dispute and several book-keeping errors.

Posted Date: 1/28/2013 12:23:20 AM | Location : United States







Related Discussions:- Comparison of the negative and positive methods, Assignment Help, Ask Question on Comparison of the negative and positive methods, Get Answer, Expert's Help, Comparison of the negative and positive methods Discussions

Write discussion on Comparison of the negative and positive methods
Your posts are moderated
Related Questions
Non-Adjusting Events - Audit Process Non-adjusting events are those that are indicative of conditions such arose than the balance sheet date as a decline in the market price o

Indications of inapplicability of Going Concern Unfortunately, Insolvency is a development industry as the economy suffers a down turn and consequently for a majority of enter

Subsequent Events - Audit Process IAS 10 Events after the Balance Sheet Date prescribes the accounting for, and disclosure of, events than the balance sheet date. Events th

Timing of Tests of Control - AUDITOR should perform tests of controls over a period of time which is adequate to determine whether, as of the date specified in management's report,


am happy to pay someone to do my acc assignment which is more auditing one

Measures To Be Taken By the Individual Auditor Proper recruitment and training of all staff; Allocating staff to particular audits where they have the appropriate skills;


Develop a list of tasks the auditor should perform in planning this audit engagement, before any audit testing begins. Ans: It is in the interest of both client and auditor t

Accounting Principles and Policies The user of the accounts expects that the accounting principles and policies used will be in conformity with IAS, be generally accepted, be