ISA 505 External Confirmation

May 9, 2026

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ISA 505 External Confirmation explains how external confirmations serve as corroborative audit evidence obtained through direct written responses from third parties. It defines external confirmations, clarifies typical assertion targets such as existence, valuations, and rights & obligations, and outlines the auditor’s role in drafting a confirmation letter signed by management on the client’s letterhead. The material distinguishes positive and negative confirmations, stresses risks of non-response for negative confirmations, and sets eligibility conditions. It further details procedures for planning, selecting parties and information, drafting and mailing, focused balance/account categories, and follow-up actions based on agreed, disagreed, or non-received responses.

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May 9, 2026