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]
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