Account receivables confirmation is normally performed by auditors to confirm the existence of accounts receivable that recorded in client’ financial statements. Theses confirmation also seek to confirm the accuracy of accounts balance that outstanding at the reporting date.

Normally, account receivables that report in the financial statements are considered as the sensitive area by auditors. And the most important of assertions that need to confirm by auditors for account receivables are existence, valuation, recoverability, as well as completeness.

To confirm the existence, auditors might have many procedures. For example, review the outstanding receivables to invoices, and review the subsequent collection.

However, for the sensitive account, auditors also performed the confirmation from customers. Because, when auditors review the invoices and subsequent collection, all the information and documents that auditors have are obtaining from client site only. The better evidence to support those outstanding and well as theirs correctness are the one that obtained from third party like customers confirmation.

There are two type of confirmation that performed by auditors. Positive and negative confirmation. The most popular one is positive confirmation.

Positive company confirmation is required customers to respond no mater the confirming information is correct or not. But the negative confirmation required only if the confirming information is incorrect.

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