Bank confirmation is the audit procedure that perform by auditor to test the existence, accuracy and the ownership of banks account and bank balance of entity.
This procedure is normally performed during the interim audit rather than at the completion stage.
Banks balance, accuracy and, ownership is very important for auditors and especially for some countries since the risks that those information could be manipulate are different from country to country.
In most case, banks balance is what auditors focus more about, but ownership management s also very important.
Normally, during the interim audit, auditors review the banks balance and select some important accounts to be confirmed. Auditors draft the confirmation and the send to client review and get the confirmation signed.
Once the confirmation signed, auditors is the one who proceeds the confirmation to banks. The bank confirmation is normally the positive confirmation and all the confirmations are responding to auditors.
For the best practices, auditors should prepare the schedule and control sheet to control completeness of sending, receipts , and confirmation.