Wiley Practitioner's Guide to GAAS 2023, 2nd Edition

17AU-C 505 External Confirmations

• Scope
• Definitions of Terms
• Objective of AU-C 505
• Requirements
  • Requirements in Other AU-C Sections
  • Results of Confirmation Procedures
  • Management's Refusal to Allow Confirmations
  • Designing the Confirmation Request
  • The Respondent
  • Timing of Confirmation Request
  • Confirming Prior to Year-End
  • Use of Negative Confirmation Requests
  • Steps in Confirmation of Accounts Receivable
  • Control of Confirmations
  • Nonresponse to Confirmation Requests
  • Nondelivery of Confirmation Request
  • Confirmation Responses Not Expected
  • Evaluating the Results
  • Confirmation Checklist
• AU-C 505 Illustrations

SCOPE

AU-C 505 provides guidance on audit procedures on external confirmations, including:

• how to respond if management refuses to allow them,
• negative confirmations and responses, and
• evaluating the results.

DEFINITIONS OF TERMS

Source: AU-C 505.06. For definitions related to this standard, see Appendix A, “Definitions of Terms”: Exception, External confirmation, Negative confirmation request, Nonresponse, Positive confirmation request.

OBJECTIVE OF AU-C 505

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

(AU-C Section 505.05)

REQUIREMENTS

REQUIREMENTS IN OTHER AU-C SECTIONS

AU-C 330.20 requires the auditor to consider whether external confirmations should be performed, and requires the use of confirmations for accounts receivable unless

• to do so ...