![]() ![]() The auditor may reduce this risk, however, by using positive confirmation requests that do not state the amount (or other information) on the confirmation request, but ask the respondent to fill in the amount or furnish other information. The auditor is not ordinarily able to detect whether this has occurred. There is a risk, however, that a respondent may reply to the confirmation request without verifying that the information is correct. A response to a positive confirmation request is ordinarily expected to provide reliable audit evidence. ![]() The auditor may use positive or negative external confirmation requests or a combination of both.Ī positive external confirmation request asks the respondent to reply to the auditor in all cases either by indicating the respondent’s agreement with the given information, or by asking the respondent to fill in information. The reliability of the audit evidence obtained by external confirmations depends, among other factors, upon the auditor applying appropriate audit procedures in designing the external confirmation request, performing the external confirmation procedures, and evaluating the results of the external confirmation procedures. Agreements entered with third parties or trade terms.Investments purchased from stockbrokers but not delivered at the balance sheet date.Property title deeds held by lawyers or financiers for safe custody or as security.Total issued and outstanding shares and declared dividend for long-term equity investments.Marketable securities held as collaterals.Bank balances and other information from bankers. ![]() The auditor may request external confirmations of the following situations: In making this determination, the auditor should consider materiality, the assessed level of inherent and control risk, and how the evidence from other planned audit procedures will reduce audit risk to an acceptable low level for the applicable financial statement assertions. The auditor should determine whether the use of external confirmations is necessary to obtain sufficient appropriate audit evidence at the assertion. SummaryĮxternal confirmation is the process of obtaining and evaluating audit evidence through a representation of information or an existing condition directly from a third party in response to a request for information about a particular item affecting assertions in the financial statements or related disclosures. Issued by Auditing Standards Committee in Taiwan on 29 October, 2002. Accounting Research and Development Foundation in Taiwan - Auditing Standards - SAS Summaries ![]()
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