In short
An external confirmation is audit evidence obtained as a direct written response to the auditor from a third party, such as a customer, bank or lawyer, on paper or electronically.
Key takeaways
- The auditor must control the requests and replies throughout.
- Positive confirmations ask for a reply in every case; negative ones ask for a reply only if the recipient disagrees.
- Nonresponses to positive requests require alternative procedures, and exceptions must be investigated.
Where it's tested
AUD: Evidence: Types & Procedures — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Which condition would make the use of negative accounts receivable confirmations INAPPROPRIATE?