Confirmation Nonresponse: What Alternative Procedures Can the Auditor Perform?
A nonresponse is not the same as a confirmed balance; the auditor needs other evidence when the confirmation procedure does not produce a reply.
Nonresponse
When a positive confirmation is not returned, the auditor does not treat silence as agreement.
Receivable alternatives
For accounts receivable, common alternatives can include examining subsequent cash receipts, shipping documents, sales records, or other support for the balance.
Payable and other balances
Alternative procedures depend on the assertion and account, such as inspecting subsequent payments, invoices, contracts, or third-party documentation.
Exam strategy
Match the alternative procedure to the assertion the confirmation was supposed to test.
The takeaway
A positive-confirmation nonresponse requires alternative evidence tailored to the relevant assertion rather than being treated as agreement.
Related Summit resources
FAQ
What is the key distinction?
A positive-confirmation nonresponse requires alternative evidence tailored to the relevant assertion rather than being treated as agreement.
What should I identify first?
A nonresponse is not the same as a confirmed balance; the auditor needs other evidence when the confirmation procedure does not produce a reply.
Why is this tested?
Understand how auditors respond when a requested confirmation is not returned.