Customer Balance Confirmation Letter Template

A major auditing issue with accounts receivable is whether the amount reflected in the customer’s subsidiary ledgerreconciles with the correct customer balance. When you audit accounts receivable, you often use confirmations to make sure the amounts reflected in accounts receivable are accurate.

  1. Balance Confirmation Letter Template
  2. Customer Balance Confirmation Letter Template Printable
  3. Loan Balance Confirmation Letter Sample
  4. Confirmation Of Balances
  5. Balance Confirmation

Sending confirmations isn’t mandatory for each audit. Whether you send confirmations is a function of your professional judgment and your prior experience with the client

To confirm accounts receivable, you need to reconcile the accounts receivable subsidiary ledger to all the customers that owe the company money to the total amount shown on the balance sheet. Your job is to make sure of three things:

  1. STANDARD FORM TO CONFIRM ACCOUNT BALANCE INFORMATION WITH FINANCIAL INSTITUTIONS ORIGINAL To be mailed to accountant. Confirmation additional information about other deposit and loan. The information presented above by the customer is in agreement with our records. Although we have not conducted a.
  2. A bank confirmation letter (BCL) is a letter from a bank or another financial institution confirming the existence of a loan or a line of credit that has been extended to a borrower.

Following on my previous post “Audit: Accounts Receivable Confirmation [Application techniques]“, 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.

Balance Confirmation Letter Template

  • The transactions represented in accounts receivable are valid, authentic obligations of third parties.

  • The customer balance is correct.

  • All uncollectible accounts have been properly written off.

The accounts receivable subsidiary ledger report, also known as an aged accounts receivable report, shows all the amounts that customers owe to the company, grouped by the number of days outstanding as of a designated date. The normal grouping is as follows:

Customer Balance Confirmation Letter Template Printable

  • Current (under 30 days outstanding)

  • 30–60 days

  • 61–90 days

  • 91–120 days

  • More than 120 days

To achieve your first two objectives — verifying customer existence and the correctness of customer balances — you test using confirmation requests. These requests are form letters sent to customers listed in the accounts receivable subsidiary ledger to verify the facts and figures contained in the client’s books. The confirmation form letter is short and lists the total amount that a customer owes at a certain date. Two types of confirmation requests are possible: positive and negative.

Loan Balance Confirmation Letter Sample

  • Positive confirmation: A positive confirmationrequest asks that a customer sign and mail the form back to you either attesting to the fact that the figure owed is correct or correcting it. A positive confirmation request can also show the dollar amount owed as blank, requiring the customer to fill it in according to its records.

  • Negative confirmation: A negative confirmation request asks the customer to reply only if the figure shown on your letter is incorrect.

Customer Balance Confirmation Letter Template

Confirmation Of Balances

Under generally accepted accounting principles (GAAP), your client must allow for uncollectible accounts. This allowance is an estimate.

Balance Confirmation

You should compare the prior year’s uncollectible accounts with the amount estimated for the audit year to see whether bad debt is increasing or decreasing. You should also look through customer files to find out what action was taken to verify that accounts were indeed uncollectible.