Sunday, September 23, 2007

#26 Bank Confirmation

In normal circumstances, auditor would send a bank confirmation to the client's bank to confirm the cash balances, loan confirmation, hire purchase & provide other client-related info as at year end date.

Bank confirmation does not only act as the confirmation of the client's cash balance, loan balances, hire purchase balance in the account, but also it other information that auditor might be interested in.

For instance, it will provide the information of corporate guarantee, which might have to be disclosed in the financial statement. Hence, receiving a bank confirmation is also critical in identifying unrecorded liabilities, if any.

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