#AskKTPAudit 13/05/22
Why does my auditor have to send out
the confirmation to my customer,
don’t they trust me??
ISA 505 - External confirmation
#AskKTPAudit 13/05/22
First,
what is external confirmation?
#AskKTPAudit 13/05/22
What is external confirmation?
External confirmation is the process of
obtaining and determining audit evidence via
a third-party representation of information
directly.
#AskKTPAudit 13/05/22
So,
When auditor has to send it?
#AskKTPAudit 13/05/22
Auditor sends the confirmation when
they need to verify :
 Bank balances and
other information from
bankers
 Account receivables
and payables
balances
 Loan from
lenders
#AskKTPAudit 13/05/22
Auditor sends the confirmation when
they need to verify :
 Investments purchased
from stockbrokers but
not delivered at the
year ended
 Property title deeds
are held by lawyers or
financiers for safe
custody or security
#AskKTPAudit 13/05/22
Sometimes,
the auditor doesn’t use audit
confirmation
#AskKTPAudit 13/05/22
When not to use audit confirmation?
 When defining
any unrecorded
liabilities from
suppliers
 When confirming
the valuation of
goods held on
consignment
 When examining
the debtors’ ability
to pay the
outstanding
balances
 When the information
is not adequately
addressed by
confirmation
#AskKTPAudit 13/05/22
So don’t ask KTP why send audit
confirmation ?
#AskKTPAudit 13/05/22
Or
My friend’s auditor don’t send any
confirmation for every universe

ISA 505 Audit External Confirmation pptx