Searching for Balance confirmation letter? Here are few handy ideas that will help you to easily write a Balance confirmation letter. Following on my previous post “ “, as a complement, this post contains illustrations which are some instant editable templates that you can use to perform accounts receivable confirmation during the course of accounts receivable audit. The “Accounts Receivable Checklist Template” will lead you to every steps of the confirmation process I discussed on the previous post. Although this not all inclusive, templates presented here should be enough to carry the process. Here are templates available in this post. Advertisement • Confirmation checklist. • Positive confirmation with statement. • Positive confirmation without statement. • Negative confirmation. • Subsequent payments confirmation. • Confirmation of selected transactions. • Description of confirmation worksheet. ACCOUNTS RECEIVABLE CONFIRMATION CHECKLIST. [Audit date] Instructions: This checklist is divided into two sections, as follows: 1. General information. If a procedure listed is not applicable, insert “ N/A” in the column “ Performed by” and explain why in the “ Explanation” column. General Information 1. Date confirmation sent. Positive Negative confirmation confirmation First request Second request N/A Third request N/A 2. For positive confirmation, list the following: Number of Amount of receivables receivables a. Accounts receivable b. Confirmations sent c. Percentage d. Percentage of confirmations sent f. Percentage of total receivables 3. For negative confirmation, list the following: Number of Amount of receivables receivables a. Accounts receivable b. Confirmations sent c. Percentage d. Percentage of confirmations sent f. Percentage of total receivables: [Procedure] [Performed by] [Date] [Explanation] 1. Obtain from client aged schedule of accounts receivable. Determine that all accounts listed in the accounts receivable schedule are customer accounts. Check that total in accounts receivable is correct and compare total with balance for accounts receivable in general ledger. Compare all or a selected sample of account balances in the schedule with account balances in the accounts receivable subsidiary ledger. Balance Confirmation Letter FormatSelect accounts for positive confirmations. Select accounts for negative confirmations. Prepare schedule of accounts to be confirmed, listing the following: a. Confirmation number. Name of account. Address of account. Receivable balance. Balance confirmed. Explanation of difference. On a test basis, check account addresses to source independent of accounts receivable department, such as a. Customer file. Telephone book. Mail confirmation requests in envelope with firm return address. Include the following: a. Customer statement. Letter requesting confirmation. Firm postage-paid envelope. For confirmation responses, do the following: a. Enter balance confirmed. Require client to reconcile any differences. Review documentation for reconciling items. Send second requests. Send third requests. For nonresponses of significant balances, do the following: a. Review subsequent cash receipts. Review customer remittance. If customer indicates it cannot confirm balance owed, request confirmation of a. Specified invoices. Specified cash receipts. Nondelivery of request. Mail to new address. Facsimile response. Photocopy response. Verify source and contents of response by telephone call to sender. Request sender to mail original confirmation request. POSITIVE CONFIRMATION WITH STATEMENT [Control number] [Client letterhead] [Date] [Name and address of customer] Gentlemen: Our auditors, [name and address], are conducting an audit of our financial statements. Please examine the accompanying statement and either confirm its correctness or report any differences to our auditors. Your prompt attention to this request will be appreciated. An envelope is enclosed for your reply. Very truly yours,. [Client signature and title] Confirmation The balance receivable from us of [amount] as of [date] is correct except as noted below:. [Debtor name] Date. By Note: This confirmation also may be used as a second request by stamping or printing in a prominent location “ SECOND REQUEST” and mailing with a copy of the statement. POSITIVE CONFIRMATION WITHOUT STATEMENT [Control number] [Client letterhead] [Date] [Name and address of customer] Gentlemen: Our auditors, [name and address], are conducting an audit of our financial statements. Please confirm to them our receivable from you of [amount] as of [date]. Your prompt attention to this request will be appreciated. An envelope is enclosed for your reply. Very truly yours, [Client signature and title] Confirmation The balance receivable from us of [amount] as of [date] is correct except as noted below: [Debtor name] Date. Notes: This confirmation also may be used as a second request by stamping or printing in a prominent location “ SECOND REQUEST”. NEGATIVE CONFIRMATION WITH STATEMENT, GUMMED STICKER, OR RUBBER STAMP Auditor’s Confirmation Request Please examine this statement. If it does not agree with your records, please report any exceptions directly to our auditors [Auditor’s name] [Auditor’s address] who are conducting an audit of our financial statements. An envelope is enclosed for your reply.
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