External confirmations is sent directly by an auditor to a third party, who is asked to respond to the auditor on the

matter included in the confirmation letter.

a) BANK CONFIRMATION LETTER is a request for information about the amount of cash held in the bank or
overdraft, details of any bank loans, details of any pledges of assets made to guarantee loans and interest rates
charged.
This information is used to confirm V&A (recorded at appropriate amount), R&O (in the client's name),
completeness (all bank loans are included in the liability on the BS), ACC (details of interest rates paid on cash
deposits and term deposits, interest rates charged on bank loans and overdrafts).
b) LEGAL CONFIRMATION is a request for information about any legal documents held by the lawyer on behalf of
the client that are of relevance to the audit (title deeds to property owned by the client, patents and other documents
providing audit evidence).
This information is used to confirm R&O (title is in the client's name).
c) PAYABLE CONFIRMATION is a letter sent directly by an auditor to their client's lenders or suppliers requesting
information about amounts owed by the client to the lenders or suppliers.
This information is used to confirm C and V&A (details of amounts outstanding at year-end), accuracy (interest
charged on those amounts).
d) RECEIVABLE CONFIRMATION is a letter sent directly by an auditor to their client's debtors requesting
information about amounts owed by the debtors to the client.
This information is used to confirm E (debtors exist), R&O (debtors confirm that they owe money to the client).
However debtors only confirm the amounts owing at year-end, they do not confirm their intention to pay the amount
due (V&A).