Audit Confirmation Letter
Before going into the details about audit confirmation letter, let's first find out what an audit is and why it is important. Audit is an analysis and authentication of any private or public entity's financial and accounting records along with the supporting documents, which is actually done a certified auditor. Audit is needed to find out the proper utilization of the money being invested in the business. It helps to check the proper flow of incoming and outgoing of money by keeping a tab on any misuse or hidden financial activity.
When a company's or an organization's financial records is presented for auditing, the auditor has to rely on the accountant about the authentication of the report submitted for the audit. It is during such a time that an auditor needs an audit confirmation letter to help him issue a valid report. The letter is written by the third-party, which can be the bank in which the company, organization or the person whose financial report has been reviewed holds an account. It is written to the auditor who is checking the report to confirm that the financial or tax report presented by them is true and accurate as per their knowledge, and they don't hold any responsibility, in case their client has concealed any vital financial evidence.
Audit confirmation letter is needed at the time of auditing. In order to save money on tax returns, most of the companies hide their financial dealings. They make every possible attempt and sometimes go up to the extent of tampering the evidences about the financial earnings. Through a proper audit, the auditor can find out any fraudulent practice adopted by the company. Hence, the audit confirmation letter along with report is needed to ensure the company's honesty and accuracy.
Auditor can request the confirmation letter to the bank that holds the company's account. The branch manager of the bank then writes the letter confirming the authenticity of the report that is submitted for the tax return purpose. It states the name and registered address of the company whose records are under verification. The letter further states the type of account the company holds and the duration of their account. It wraps with an assertion about the accuracy of the record.
Audit Confirmation Letter
ABC Bank Ltd.
1234 Halley Street
Camden, NJ 84507
10 July, 2010
XYZ Financial and Tax Service
2843 Sherman Avenue
Camden, NJ 84502
Further to your request about recognizing the financial report of our client, Faith Electronics Ltd., I am pleased to write this confirmation letter on the behalf of ABC Bank. This letter is to confirm that the quarterly financial report of our client, Faith Electronics Ltd. presented for audit purpose is true and accurate to our knowledge.
Faith Electronics Ltd. has been holding current account in our bank since January 2007. There registered addressed filed in our record is 1421 Greenway Road, Camden, NJ 84579.
We hold no responsibility if any misappropriate practice is found during the audit from our client.
Getting confirmation about the accuracy of the presented report from the third-party at the time of audit is an important process through which the auditor can believe about the company's assertions with respect to their financial statements. With the help of the audit confirmation letter, the auditor can verify the assertions made by their clients.