External Conformations

Question 1

What are some types of external conformations

Answer 1

Accounts receivable circularisation letter

Solicitor letter

Bank report letter

Inventory held by third parties

Question 2

Accounts receivable letter - support &not support

Answer 2

Support:
Existence. Reply received directly
Cut off year end transactions reconciled by customer

Not support:
Completeness. Customers may not query understated balance owed

Valuation: customer may not list all outstanding balances. Does not confirm payment

Question 3

Solicitor letter support &not support

Answer 3

Support:
existence of claims

Not support:
Valuation. Uncertainty of our one of legal claims, may not list all claims

Question 4

Bank report letter, support and not support

Answer 4

Support:
Existence of accounts

Completeness or accuracy. Disclaimer applied

Question 5

Inventory held by third parties, support and not support

Answer 5

Support: existence of inventory

Not support:
Valuation and condition