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Back to the track — External Audit Associate
You selected 24 customers worth 620,000.00 from receivables of 2,450,000.00. Eighteen replied, three differed and six did not respond. The CFO wants to send requests and treat silence as agreement, while one reply is 180,000.00 against 230,000.00. Prove population and addresses, retain control, resolve 50,000.00 and perform assertion-specific alternatives.
External confirmation evidence depends on auditor control over the information requested, respondent selection, address validation, request preparation, dispatch, follow-up and direct receipt. Management may transmit a request in a controlled process, but the auditor determines the address and content, observes dispatch, prevents substitution and directs the response back to the auditor. A client-prepared, client-dispatched and client-collected process loses that control. Begin with the assertion, independently validate contact details and retain the request register, population fingerprint and dispatch evidence.
Tie the detailed population to the ledger before selecting. Include large, risky, zero-balance high-activity, related, old and disputed accounts as relevant. A 24-item selection covering 620,000.00 of 2,450,000.00 must address risk characteristics, not value percentage alone. Lock the population and document every removal or substitution.
Positive requests require a response whether agreeing or not; blank forms reduce passive agreement but may lower response quality. Negative requests provide weak evidence from silence and are suitable only with low risk, large homogeneous populations, small balances, effective controls and reason to expect attention. Request terms, guarantees, covenants or signatories when the assertion needs more than a balance.
A polished reply may come from a new domain or client employee. Compare addresses with contracts, prior invoices and official sources; use an independent phone number when needed and inspect message metadata or platform logs. Multiple replies from one address, identical wording or management-prepared attachments require an independent route before reliance.
A 180,000.00 reply against a 230,000.00 ledger balance opens a 50,000.00 investigation into invoices, cash, credit notes, delivery and legal entity. Test management's itemised explanation independently; never label a difference timing without an expected clearing date. Results may be no error, corrected error, uncorrected misstatement or extended work.
Follow up under auditor control, then perform assertion-specific alternatives: subsequent cash from independent bank evidence, invoice to order and delivery, and dispute or return correspondence. Subsequent receipt supports existence and amount only within its boundaries. Internal invoices alone are insufficient. Some risks, such as doubtful customer identity, may make direct response irreplaceable and create a scope issue.
The treatment starts from these documents. Follow the numbers to identify recognition date, amount, counterparty, reference and approval evidence before preparing the entry.
Facts and supporting evidence
The external customer confirmed a 30,000.00 pre-close payment absent from the entity books.
Correct treatment and entry
| Account | Debit | Credit |
|---|---|---|
| Cash at bank | 30,000.00 | |
| Trade receivables | 30,000.00 | |
| Total (SAR) | 30,000.00 | 30,000.00 |
Treatment and financial effect
It records cash after tying the reply to bank and beneficiary.
Reperformance starts from this case's own facts: The external customer confirmed a 30,000.00 pre-close payment absent from the entity books. Obtain the original source that proves this event. The training drawings Confirmation control register, Confirmation exception reconciliation explain field shape and reading order; they do not replace the case document or transfer their figures into it. Match entity, period, currency, reference and version to the trial balance, assertion, population and internal or external evidence, then confirm that the source supports the debit side (Cash at bank) and the credit side (Trade receivables). Missing ownership, date, reference or approval remains an open exception; a balancing journal or undocumented assumption does not cure it.
Remeasure from the facts before reading the proposed journal, then add it independently: total debits 30,000.00 and total credits 30,000.00. Debit detail: Cash at bank for 30,000.00. Credit detail: Trade receivables for 30,000.00. Link every line to the recognition or measurement rule explained in the lecture, then trace its reference and posting date. After posting, test the audit workpaper, reperformance and cross-references. Equal sides prove arithmetic only, not the correct account, period or classification.
Before close, compare the correct treatment with the common alternative and record its specific effect: Cash is understated and suspense overstated by 30,000.00. Do not close until the journal agrees with the procedure conclusion, misstatement schedule and client communication and an independent reviewer can move from balance to account, reference and this event's own source. Keep the calculation, source version, journal identifier, reconciliation result and unresolved exceptions in the same workpaper. An attached file without a stated conclusion is not review evidence.
The confirmation register links every request to locked population, validated address, dispatch, original reply, exception and alternative. Client users cannot edit replies or delete selections; fingerprints, access and review history remain retained.
Control 24 requests worth 620,000.00: validate addresses, classify 18 replies, three exceptions and six non-responses, and open 50,000.00 into supported timing and potential residual.
Work output: A workbook
These are yours once downloaded, and need no account. Fill them with your own figures and keep them in your portfolio.
Use reconciliation to open reply and ledger into items without posting before cause testing.
Run confirmation from population to conclusion through eight decisions.
What you haveReceivable list does not tie.
The arithmetic in this case runs in the tool itself, which is open to you any time with your own figures.
Log requests without locked population, unverified addresses, management-routed replies, unreconciled exceptions and non-responses without suitable alternatives.
This is not sent anywhere and not stored here. Write it down for yourself — in the workpaper you downloaded, or on paper.
Strong confirmation starts with a risk-led population and selection and remains auditor-controlled from address through reply. Exceptions are investigated item by item, non-responses receive assertion-specific alternatives, and evaluation considers coverage and concentration, not response rate alone.
How do you control 24 confirmations and handle a 180,000.00 reply against 230,000.00 plus six non-responses?
Answer every question. Getting them all right records this lesson; you may retry as often as you need.
Reading alone records nothing.
The complete applied walkthrough is available below while the recording is prepared.
Lock the 2,450,000.00 population and select 24 customers worth 620,000.00 by risk, not convenient email. Validate addresses, control the request, dispatch and follow-up, and receive the reply directly even when management transmits under my control. Of 18 replies, three differ and six do not respond. A 180,000.00 reply against 230,000.00 is not an automatic 50,000.00 journal: investigate cash, invoices and delivery, support 30,000.00 timing and retain 20,000.00. Perform alternatives for silence, then evaluate coverage, value and concentration.
An oral response or reply forwarded by management breaks part of the evidence chain. Record identity and verification, seek direct written confirmation or perform suitable alternatives. A scanned letter, unverifiable signature or incomplete attachment is not reliable merely because it looks formal. Document every break and compensating procedure.
Maintain a register of sent, returned, exception, non-response, alternative and result. A 75% response rate is not a conclusion; examine count, value and risk concentration. Analyse whether differences are valid timing, premature revenue or directional overstatement, then connect results to risk, additional tests and the misstatement schedule.
When management asks that a customer not be confirmed, investigate and evidence the reason, assess reasonableness, consider fraud risk, perform alternatives where appropriate and communicate within the engagement. A legal dispute may change wording, not remove the need for evidence. An unreasonable refusal that blocks necessary evidence may affect scope.
Before concluding, retie every selection to the original and final population, capture post-dispatch journals, retain original replies and identity checks, resolve differences and describe alternatives and limits. Separate bank, legal, customer and supplier requests. A cold reviewer should navigate from 2,450,000.00 to 24 selections and every response, exception and conclusion.
Facts and supporting evidence
A customer denied a 20,000.00 invoice and investigation proved no delivery.
Correct treatment and entry
| Account | Debit | Credit |
|---|---|---|
| Revenue | 20,000.00 | |
| Trade receivables | 20,000.00 | |
| Total (SAR) | 20,000.00 | 20,000.00 |
Treatment and financial effect
It removes an unperformed sale after corroboration, not on the reply alone.
Reperformance starts from this case's own facts: A customer denied a 20,000.00 invoice and investigation proved no delivery. Obtain the original source that proves this event. The training drawings Confirmation control register, Confirmation exception reconciliation explain field shape and reading order; they do not replace the case document or transfer their figures into it. Match entity, period, currency, reference and version to the trial balance, assertion, population and internal or external evidence, then confirm that the source supports the debit side (Revenue) and the credit side (Trade receivables). Missing ownership, date, reference or approval remains an open exception; a balancing journal or undocumented assumption does not cure it.
Remeasure from the facts before reading the proposed journal, then add it independently: total debits 20,000.00 and total credits 20,000.00. Debit detail: Revenue for 20,000.00. Credit detail: Trade receivables for 20,000.00. Link every line to the recognition or measurement rule explained in the lecture, then trace its reference and posting date. After posting, test the audit workpaper, reperformance and cross-references. Equal sides prove arithmetic only, not the correct account, period or classification.
Before close, compare the correct treatment with the common alternative and record its specific effect: Revenue and suspense are overstated by 20,000.00. Do not close until the journal agrees with the procedure conclusion, misstatement schedule and client communication and an independent reviewer can move from balance to account, reference and this event's own source. Keep the calculation, source version, journal identifier, reconciliation result and unresolved exceptions in the same workpaper. An attached file without a stated conclusion is not review evidence.
Facts and supporting evidence
A supplier confirmed a 48,000.00 service received before year-end but unrecorded.
Correct treatment and entry
| Account | Debit | Credit |
|---|---|---|
| Service expense | 48,000.00 | |
| Accrued expenses | 48,000.00 | |
| Total (SAR) | 48,000.00 | 48,000.00 |
Treatment and financial effect
It addresses completeness after inspecting contract, performance and subsequent invoice.
Reperformance starts from this case's own facts: A supplier confirmed a 48,000.00 service received before year-end but unrecorded. Obtain the original source that proves this event. The training drawings Confirmation control register, Confirmation exception reconciliation explain field shape and reading order; they do not replace the case document or transfer their figures into it. Match entity, period, currency, reference and version to the trial balance, assertion, population and internal or external evidence, then confirm that the source supports the debit side (Service expense) and the credit side (Accrued expenses). Missing ownership, date, reference or approval remains an open exception; a balancing journal or undocumented assumption does not cure it.
Remeasure from the facts before reading the proposed journal, then add it independently: total debits 48,000.00 and total credits 48,000.00. Debit detail: Service expense for 48,000.00. Credit detail: Accrued expenses for 48,000.00. Link every line to the recognition or measurement rule explained in the lecture, then trace its reference and posting date. After posting, test the audit workpaper, reperformance and cross-references. Equal sides prove arithmetic only, not the correct account, period or classification.
Before close, compare the correct treatment with the common alternative and record its specific effect: Purchases are overstated and accrued expenses understated by 48,000.00. Do not close until the journal agrees with the procedure conclusion, misstatement schedule and client communication and an independent reviewer can move from balance to account, reference and this event's own source. Keep the calculation, source version, journal identifier, reconciliation result and unresolved exceptions in the same workpaper. An attached file without a stated conclusion is not review evidence.
Facts and supporting evidence
The bank confirmed a 75,000.00 borrowing credited to cash but unrecorded.
Correct treatment and entry
| Account | Debit | Credit |
|---|---|---|
| Cash at bank | 75,000.00 | |
| Loan payable | 75,000.00 | |
| Total (SAR) | 75,000.00 | 75,000.00 |
Treatment and financial effect
It recognises cash and liability from contract and direct bank reply.
Reperformance starts from this case's own facts: The bank confirmed a 75,000.00 borrowing credited to cash but unrecorded. Obtain the original source that proves this event. The training drawings Confirmation control register, Confirmation exception reconciliation explain field shape and reading order; they do not replace the case document or transfer their figures into it. Match entity, period, currency, reference and version to the trial balance, assertion, population and internal or external evidence, then confirm that the source supports the debit side (Cash at bank) and the credit side (Loan payable). Missing ownership, date, reference or approval remains an open exception; a balancing journal or undocumented assumption does not cure it.
Remeasure from the facts before reading the proposed journal, then add it independently: total debits 75,000.00 and total credits 75,000.00. Debit detail: Cash at bank for 75,000.00. Credit detail: Loan payable for 75,000.00. Link every line to the recognition or measurement rule explained in the lecture, then trace its reference and posting date. After posting, test the audit workpaper, reperformance and cross-references. Equal sides prove arithmetic only, not the correct account, period or classification.
Before close, compare the correct treatment with the common alternative and record its specific effect: Income is overstated and liability understated by 75,000.00. Do not close until the journal agrees with the procedure conclusion, misstatement schedule and client communication and an independent reviewer can move from balance to account, reference and this event's own source. Keep the calculation, source version, journal identifier, reconciliation result and unresolved exceptions in the same workpaper. An attached file without a stated conclusion is not review evidence.