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What type of audit procedure involves independent confirmation directly received by the auditor from third parties regarding account balances?

AAnalytical Procedures
BExternal Confirmation
CInspection of Assets
DReperformance

Explanation

• External Confirmation involves obtaining written verification directly from independent third parties (e.g., bank account balances, customer receivables).
• Auditing standards consider third-party external confirmations highly reliable audit evidence for verifying existence and accuracy.
• Common applications include bank confirmation letters, accounts receivable confirmations, and legal debt attestations.

Exam Relevance
  • Topic: Auditing
  • Subtopic: Audit Evidence
Submitted by: mcqstutor Team More Finance & Accounting MCQs →

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