Review Note 3 required you to perform procedures on accounts receivable items selected for testing the existence assertion. Refer to PCAOB AS 2310 paragraph 34. What is the recommended procedure for verifying the existence assertion of accounts receivable? Explain why this procedure provides more reliable audit evidence than other procedures?

Paragraph 34: For the purpose of this section, accounts receivable means The entity's claims against customers that have arisen from the sale of goods or services in the normal course of business, and A financial institution's loans. Confirmation of accounts receivable is a generally accepted auditing procedure. As discussed in paragraph .06, it is generally presumed that evidence obtained from third parties will provide the auditor with higher-quality audit evidence than is typically available from within the entity. Thus, there is a presumption that the auditor will request the confirmation of accounts receivable during an audit unless one of the following is true: Accounts receivable are immaterial to the financial statements. The use of confirmations would be ineffective.4 The auditor's combined assessed level of inherent and control risk is low, and the assessed level, in conjunction with the evidence expected to be provided by analytical procedures or other substantive tests of details, is sufficient to reduce audit risk to an acceptably low level for the applicable financial statement assertions. In many situations, both confirmation of accounts receivable and other substantive tests of details are necessary to reduce audit risk to an acceptably low level for the applicable financial statement assertions.