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Unformatted text preview: The Confirmation Process 355 AU Section 330 The Confirmation Process (Supersedes section 331.03-.08) Source: SAS No. 67. Effective for audits of fiscal periods ending after June 15, 1992, unless otherwise indicated. Introduction and Applicability .01 This section provides guidance about the confirmation process in au- dits performed in accordance with generally accepted auditing standards. This section Defines the confirmation process (see paragraph .04). Discusses the relationship of confirmation procedures to the auditor's assessment of audit risk (see paragraphs .05 through .10). Describes certain factors that affect the reliability of confirmations (see paragraphs .16 through .27). Provides guidance on performing alternative procedures when re- sponses to confirmation requests are not received (see paragraphs .31 and .32). Provides guidance on evaluating the results of confirmation procedures (see paragraph .33). Specifically addresses the confirmation of accounts receivable and su- persedes section 331, Inventories , paragraphs .03.08 and the portion of section 331.01 that addresses the confirmation of receivables (see paragraphs .34 and .35). This section does not supersede the portion of section 331.01 that addresses the observation of inventories. .02 This section does not address the extent or timing of confirmation pro- cedures. Guidance on the extent of audit procedures (that is, considerations involved in determining the number of items to confirm) is found in section 350, Audit Sampling , and section 312, Audit Risk and Materiality in Conduct- ing an Audit . Guidance on the timing of audit procedures is included in section 318, Performing Audit Procedures in Response to Assessed Risks and Evaluat- ing the Audit Evidence Obtained . [Revised, March 2006, to reflect conforming changes necessary due to the issuance of Statement on Auditing Standards No. 110.] .03 In addition, this section does not address matters described in section 336, Using the Work of a Spet , or in section 337, Inquiry of a Client's Lawyer Concerning Litigation, Claims, and Assessments . Definition of the Confirmation Process .04 Confirmation is the process of obtaining and evaluating a direct communication from a third party in response to a request for information AU 330.04 356 The Standards of Field Work about a particular item affecting financial statement assertions. The process includes Selecting items for which confirmations are to be requested. Designing the confirmation request. Communicating the confirmation request to the appropriate third party. Obtaining the response from the third party. Evaluating the information, or lack thereof, provided by the third party about the audit objectives, including the reliability of that information....
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This note was uploaded on 04/10/2010 for the course ACCOUNTING 122 taught by Professor Dick during the Spring '10 term at American Academy of Art.
- Spring '10