It's an auditing question

External confirmation is a useful method of obtaining audit evidence in relation to trade receivables.

Discussion:

1. In relation to external confirmation of trade receivables:
2. Explain the difference between a positive and a negative confirmation;
3. Explain the two different types of positive confirmation and the advantages and disadvantages of each;
4. List the reconciling items highlighted by external confirmation of trade receivables.
5. Describe the principal risks associated with financial statement assertions relating to trade receivables.

(ACCA adapted)