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

No Comments