Wiley Practitioner's Guide to GAAS 2018, 2nd Edition

AU-C 505 External Confirmations

AU-C Original Pronouncement

Source

Statement on Auditing Standards (SAS) 122.

Definitions of Terms

Source: AU-C 505.06

1. Exception. A response that indicates a difference between information requested to be confirmed or contained in the entity's records, and information provided by the confirming party.
2. External confirmation. Audit evidence obtained as a direct written response to the auditor from a third party (the confirming party), either in paper form or by electronic or other medium (for example, through the auditor's direct access to information held by a third party).
3. Negative confirmation request. A request that the confirming party respond directly to the auditor only if the confirming party disagrees with the information provided in the request.
4. Nonresponse. A failure of the confirming party to respond, or fully respond, to a positive confirmation request or a confirmation request returned undelivered.
5. Positive confirmation request. A request that the confirming party respond directly to the auditor by providing the requested information or indicating whether the confirming party agrees or disagrees with the information in the request.

Objective of AU-C Section 505

AU-C Section 505.05 states that:

…the objective of the auditor, when using external confirmation procedures, is to design and perform such procedures to obtain relevant and reliable audit evidence.

Requirements

Related AU-C 330 Requirements

AU-C 330.20 requires ...