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Explore a sample format for creditors’ confirmations, crucial for auditing to validate balances. Learn about positive confirmation requests and get insights on illustrative letters for creditors, ensuring accuracy in financial records. Optimize your audit processes with this comprehensive guide.

In this article author has shared the the sample format  for creditors confirmation which is required in many engagements in order to verify the creditors balance as on cut off date.

Definitions as per SA 505: External confirmation

External Confirmation: Audit evidence obtained by the auditor as a direct written response to the auditor from a third party in paper form or by electronic form or other medium

Positive Confirmation Request: A request that the confirming party respond directly to the auditor indicating whether the confirming party agrees or disagrees with the information in the request, or providing the requested information

Illustrative Letter of Confirmation to be Sent to Creditors – Positive Form

[Letterhead of Entity]

[Name and Address of Creditor]

Dear Sir,

For audit purposes, kindly confirm directly to our auditors (name and address of the auditors) that the balance of INR _ _ _ _ _ _ _ _ _ _due by us to you as on _ _ _ _ _  as shown by our books, is correct. The details of the balance are as under:

Particulars Invoice Number Date Narration Amount
Purchase
Purchase
Purchase
Payment
Purchase
Amount Due       90.73

A stamped envelope addressed to our auditors is enclosed for your convenience.

  • If the amount shown is in agreement with your books, kindly strike-out the paragraph marked (B) below.
  • If the amount shown is not in agreement with your books, kindly furnish the details in the proforma given in the paragraph marked (B) below and strike-out paragraph (A).

In either case, kindly sign at the place provided below and return this entire letter directly to our auditors in the enclosed envelope. Your prompt compliance with this request will be appreciated. In case the list of invoices forming the balance is too large, these details may not be given.

Kindly return this form in its entirety.

Yours faithfully,

(Signature of responsible official of the entity)

[Name and Address of Creditors]

(A) We confirm that the above stated amount is correct as at ______

OR

(B) We state that the above-stated amount is not correct as per our records. The details of the balance as at _____ as per our records are as below:

Particulars Invoice Number Date Narration Amount (Lakhs)
Sale
Sale
Sale
Receipt
Sale
Amount       96.75

Date

(Signature of creditor/responsible official)

*****

For any inquiry you may write us on: [email protected]

Disclaimer: The information provided by the author in the article is for general informational purposes only. All information provided is in the good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information in the article.

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Author Bio

CA Ramanujan Sharma is a seasoned Practicing Chartered Accountant and the Managing Partner of M/s NKRS and Co. With extensive experience in Management Consultancy, Auditing, Taxation, and Finance, including specialized skills in MIS and Cost Sheet analysis, he has established himself as a proficient View Full Profile

My Published Posts

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