Confirmation as Audit Evidence
Introduction The confirmation in the auditing process is a technique for obtain and evaluate a communication from a third party in response to a request for information made by the auditor. The request of the information can be both written and oral communications. According to Aldhizer and Cashell (2006), the auditor controls the initial mailing of confirmation requests to the client’s banks, debts of their customers and others. Prasad (2007) described, that the purpose of the confirmation is to bring more credibility on the information that the auditors have in their control. The auditor will choose the confirmation procedure in order to corroborate that the information provided by their client is reliable and valid. There are two main types of confirmations that are related to where corroborate the information obtained and these are the internal and external confirmations. In addition, there are two types of external confirmations related to corroborate the information requested and there are the positive and negative confirmations. Internal Confirmations The internal confirmations are information given by people inside of the company. The author Prasad (2007) stated in their article that the internal sources consists of people such as management, or others that are related and could respond to the request made by the auditor. In the questionnaire (item 3) given to sixteen CPAs, a 12.5% of them think that the internal confirmations are not a sufficient source to corroborate the information obtained. This is important because the information is provided by people within the organization. This will cause a conflict of interest with the interested parties in the company, because certain people could omit relevant information that will affect the credibility of the organization. When management provides the evidence, the auditor should consider whether these information received is correct and if it is not correct, the auditors can...
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