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External Confirmation Procedures for Debtors

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patillokesh614
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13 views3 pages

External Confirmation Procedures for Debtors

Uploaded by

patillokesh614
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

How can external confirmation be

performed when there are a large


number of debtors?

What procedures should be followed if


no reply is received from the debtors?
External Confirmation

Sampling: Balance size, risk level, or the nature of the transactions.


Tiered Approach: Segment debtors into tiers based on criteria such as
the amount owed, transaction frequency, and historical reliability.
Prioritize confirmations starting from the top tier (largest balances or
highest risk) and adjust your audit efforts based on the risk assessment
of each tier.
Automated Tools & Electronic Confirmations
Handling Non-Responses from Debtors

Follow-Up Procedures.
Alternative Audit Procedures: Subsequent cash receipts.
Review other supporting documentation such as invoices, contracts,
delivery receipts, or bank statements to corroborate the existence of the
debtor and the validity of the balance.
Evaluate Audit Implications

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