You are auditing accounts receivable. The majority of the clients customers are in Indonesia and other parts of remote South-East Asia. These customers have large account balances, of which 30% have been outstanding for more than 6 months.

i) If confirmation is used, what form of confirmation should it be? Justify your choice. ii) Can confirmation be used to verify recoverability of the outstanding invoices? Explain.

(iii) Because of communication difficulties, direct confirmation of the accounts receivables balances is unlikely to give satisfactory results. Describe the audit procedures you would perform to gather sufficient appropriate audit evidence.