CA Pari is conducting the audit of Heavy Ltd., a company with large number of customers which are generally small retail shop owners. While…

(i) CA Pari is most likely to use Negative Confirmation Request since she has assessed the risk of material misstatement as low and internal control is operating effectively. (ii) The auditor shall not use negative confirmation requests as the sole substantive audit procedure to address an assessed risk of material misstatement at the assertion level unless all of the following are present: The auditor has assessed the risk of material misstatement as low and has obtained sufficient appropriate audit evidence regarding the operating effectiveness of controls relevant to the assertion;The population of items subject to negative confirmation procedures comprises a large number of small, homogeneous, account balances, transactions or conditions;A very low exception rate is expected; andThe auditor is not aware of circumstances or conditions that would cause recipients of negative confirmation requests to disregard such requests.