Account payable confirmation is the confirmation that prepare and process by auditors to cross-check the amount and information between the client’s records and client’s supplier’s records.  Those including the outstanding balances, and transaction.

Account payable is the current liabilities that records by the client in financial statements as of the reporting date. It shows the current liabilities that the entity owe its suppliers.

It is not normal that auditors perform account payable confirmation to suppliers. In most case, auditors perform bank and account receivable confirmation.

But, if auditors want to obtain the confirmation from third parties about the information related to account payable, then probably auditor need to have the control that the control or documents related to the recording of account payable are not reliable.

Account payable confirmation is normally prepared by auditors and then the draft of confirmation will send to client for review. Once the confirmation is reviewed, then those draft need to sign authorized by management in the entity that has enough authority to sign on the form. This is normally the General Manager or CFO of the entity.

Once the confirmations are signed, then auditors need to processes the confirmation to the clients’ suppliers. This is to ensure that the information is delivered to those creditors correctly.

Those creditors then send back the confirmation to auditors directly. This is to make sure that auditor received the correct information.

Normally, there are two main types of confirmation that auditors could use to perform AP confirmation. One is positive confirmation and second is the negative confirmation.

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Positive confirmation is required suppliers to review the information, complete the form and then respond back directly to auditors whether or not the information is correct.

Negative confirmation is required suppliers to review the information and then respond bank to auditors only if the information in the confirmation is incorrect. Negative confirmation is not popular because auditors sometime could not ensure the completeness of information sent.