Bank confirmations, trade receivable and payable confirmations and lawyers' letters are the most common types of external confirmation. Confirmation letters are prepared in the company's name, but sending them and receiving the replies is controlled by the auditor.
Alternative procedures are performed for confirmations that go unanswered or show differences. Having account reconciliations done before year end speeds up the confirmation process considerably.
Source: BDS 505
Related terms
Audit evidenceAny information and documents the auditor uses to reach the conclusions on which the opinion is based.Independent auditReasonable assurance provided by an independent auditor on whether the financial statements are presented fairly, in all material respects, in accordance with the applicable financial reporting framework.Adverse opinionThe opinion in which the auditor states that the financial statements are not presented fairly, where misstatements are both material and pervasive.Agreed-upon proceduresAn engagement in which the practitioner performs procedures agreed with the entity and, where relevant, a third party, and reports only the findings without providing assurance.Analytical proceduresThe evaluation of financial information through analysis of plausible relationships among financial and non-financial data.Assurance engagementAn engagement providing assurance, against specified criteria, on a subject matter other than an audit or review of historical financial information.
Last updated: October 22, 2026 · This definition is for general information only.