The auditor should ordinarily mail confirmation requests to all banks with which the client has conducted any business during the year,regardless of the year-end balance,since

Question

Quizplus · Accepted Answer

The confirmation form also seeks information about indebtedness to the bank, which could be a material disclosure for financial statement users. Therefore, the auditor should send confirmation requests to all banks with which the client has conducted any business during the year, regardless of the year-end balance. This is in line with generally accepted auditing standards. B and D are not correct because the primary purpose of bank confirmations is to provide evidence about the existence, completeness, and valuation of cash balances and other bank-related information, not to detect kiting activities or to relieve the auditor of responsibility for nondetection of forged checks.

The Auditor Should Ordinarily Mail Confirmation Requests to All Banks