List and discuss the 3 factors mentioned in the chapter that may affect the reliability of confirmations

Three factors that affect the reliability of accounts receivable confirmations are

• The type of confirmation request.
• Prior experience on the client or similar engagements.
•  The intended respondent.
  The types of confirmations include positive and negative confirmations. Generally, positive confirmations are considered more reliable because the recipient is required to respond to the auditor regardless of whether a misstatement exists or not. Prior experience with the client in terms of confirmation response rates, misstatements identified, and the accuracy of returned confirmations should be considered when assessing the reliability of accounts receivable confirmations. For example, if response rates were low in prior audits, the auditor might consider obtaining evidence using alternative procedures. Finally, the intended respondents to accounts receivable confirmations may vary from individuals with little accounting knowledge to highly qualified accounting personnel in large corporations. The auditor should consider the respondent's competence, knowledge, ability, and objectivity when assessing the reliability of confirmation requests.