confirmation letter
A written response to an auditor’s request to confirm the existence or value of an item. Examples of commonly requested confirmation letters include the *circularization by external auditors of an organization’s customers to confirm *accounts receivable balances, and requests to banks for evidence of bank *deposits and *loans. A positive confirmation involves a third party confirming a communicated balance, whether correct or incorrect. A negative confirmation requests a reply only in the case of disagreement with a stated amount. As *third party evidence is generally considered by auditors to be of high value, confirmation letters tend to be viewed as strong *audit evidence. Auditors requesting confirmation letters normally ensure that responses are sent directly to them (rather than via an *auditee) to reduce the potential for the responses being intercepted and amended.

Auditor's dictionary. 2014.

Look at other dictionaries:

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