The Purpose And Future Of Bank Confirmation Letters

Why do auditors request bank confirmation letters? Are the bank statements not enough?

The reasons why auditor request bank confirmation letters are as follows:

  1. To ensure that all bank accounts held by a company are included in the financial statements.
  2. To ensure all interest payable or receivable has been correctly accounting for in the financial statements
  3. To all security that may be held be the bank is correctly disclosed in the financial statements.

The future of bank confirmation letters

The preparation of bank confirmation letters has always been an onerous task for bankers, and in todays’ hi-tech environment, the expectation for speedy and accurate delivery has become higher.

A number of firms has released software which may improve the efficiency of processing bank confirmation letters though online portals. Once the all banks have signed up and the integrity of the security can be validated, this may prove to be the future of bank confirmations.

The Auditing Practices Board are currently reviewing the future of how bank confirmations will fit into auditing going forward and as such are looking to revise International Standard Auditing 505 (External Confirmations) in this regard.

What questions do you have?

We are happy to help. Please post your comment below or call Nigel Mayberry, Director of Audit Services at Cooney Carey, on 01 677 9000. Alternatively, send him an email: nmayberry@cooneycarey.ie

To keep in touch, connect with our friendly team on LinkedIn.

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    Posted on October 10, 2017 by Nigel Mayberry