Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

During an audit, which factor is NOT typically assessed when confirming accounts receivable?

1. Materiality of account balances

2. Age of the account balances

3. Type of goods sold

4. Status of follow-up actions

The correct answer is: Type of goods sold

The assessment of accounts receivable during an audit typically focuses on various factors that provide insight into the collectibility and accuracy of the reported balances. While the type of goods sold can provide context for the nature of transactions, it is not a primary factor considered when confirming accounts receivable. The key purpose of confirming accounts receivable is to verify the existence and accuracy of the amounts owed by customers. Factors like the materiality of account balances inform the auditor about the significance of the accounts in the financial statements and the level of scrutiny required. The age of account balances is critical as older accounts may indicate potential collectibility issues, prompting the auditor to investigate further into the likelihood of receiving payment. Evaluating the status of follow-up actions ensures that any overdue accounts are being actively managed, which is crucial for assessing the overall financial health of the entity. In summary, while the type of goods sold relates to the nature of the business's operations, it does not directly impact the confirmation of accounts receivable in the same manner that materiality, aging, and follow-up status do.