Communication addressed to the debtor requesting confirmation on whether the balance as stated on the communication is correct or incorrect is known as a:
A) negative confirmation.
B) positive confirmation.
C) bank confirmation.
D) management letter.

Question

Quizplus · Accepted Answer

A positive confirmation is when the auditor requests the debtor to confirm whether the balance as stated on the communication is correct or not. This is done to provide evidence for the existence and accuracy of the debt balance. A negative confirmation would ask the debtor to respond only if the balance is incorrect, which is less reliable. Bank confirmation and management letters are different types of communication used in auditing, but not related to debtor confirmation specifically.

Communication Addressed to the Debtor Requesting Confirmation on Whether the Balance