Audit confirmations: design, control, and nonresponses
Choose the confirming party, maintain auditor control, evaluate exceptions, and respond correctly when a positive confirmation is unanswered.
The decision that earns the point
Identify the engagement facts and governing framework
A confirmation seeks audit evidence directly from a knowledgeable external source. The auditor selects and addresses requests, maintains control over sending and receiving them, evaluates reliability and exceptions, follows up positive-request nonresponses, and performs applicable alternative procedures before concluding on sufficiency.
Exam use
AUD can test confirmation design, positive and negative requests, auditor control, electronic intermediaries, exceptions, nonresponses, alternative procedures, and the issuer or nonissuer standard stated.
Your scratch-paper plan
Solve it in three moves
- 1
Link the request to risk and assertion
Choose the information, population, and knowledgeable confirming party based on the relevant assertion and assessed risk.
PCAOB AS 2310: The Auditor's Use of Confirmation - 2
Maintain auditor control
Control selection, addressing, sending, receiving, and evaluation, including the reliability implications of an intermediary.
PCAOB AS 2310: The Auditor's Use of Confirmation - 3
Resolve incomplete evidence
Follow up a positive-request nonresponse and perform applicable alternative procedures before evaluating sufficiency.
PCAOB AS 2310: The Auditor's Use of Confirmation
Worked problem
Work the facts before choosing the answer
CPAPass illustration assumptions: this is a PCAOB issuer audit. A customer does not respond to a positive accounts-receivable confirmation after the auditor maintained control over a properly designed request.
CPAPass original exam illustration using stated assumptions
Show the work
The nonresponse does not provide the requested confirmation evidence. The auditor follows up and then performs applicable alternatives, such as examining subsequent cash receipts and relevant shipping and contractual documents.
Rule source: PCAOB AS 2310: The Auditor's Use of ConfirmationAnswer
Document the nonresponse and follow-up, perform the applicable alternative procedures, and evaluate all resulting evidence before concluding whether sufficient appropriate evidence was obtained.
Rule source: PCAOB AS 2310: The Auditor's Use of ConfirmationDo it now
Test the same decision with a fresh question
Start with free AUD practice. Create an account only when you want the 5-day no-card CPAPass trial and continued section practice.
The trap and the repair
Common trap
Letting the client select, send, or collect requests breaks auditor control and weakens the reliability of the process.
Repair
Map every handoff and keep selection, transmission, receipt, and evaluation under auditor control.
Confirmation response map
Each response state requires a different next action
Do not treat a response, exception, nonresponse, and unreliable transmission as interchangeable evidence outcomes.
| Outcome | Required response | Evidence checkpoint | Authority |
|---|---|---|---|
| Reliable response | Evaluate the confirmed information and any difference from company records | Relevant assertion and response reliability | PCAOB AS 2310: The Auditor's Use of Confirmation |
| Positive-request nonresponse | Follow up, then perform applicable Appendix C alternatives | Evidence obtained from cash receipts, shipping, contracts, or other relevant sources | PCAOB AS 2310: The Auditor's Use of Confirmation |
| Electronic intermediary concern | Evaluate intermediary controls, relationships, interception, and alteration risk | Whether the process can produce reliable direct evidence | PCAOB AS 2310: The Auditor's Use of Confirmation |
| Nonissuer engagement | Apply current AU-C 505 to the design and response state | Framework-specific procedure and conclusion | AICPA AU-C 505: External Confirmations |
After a miss
Repair a confirmation-process miss
- 1
Write assertion, confirming party, request type, control path, and response state before choosing the next procedure.
- 2
Rework the illustration once with an exception and once with an unreliable response instead of a nonresponse.
- 3
Answer a fresh AUD confirmation question and explain why the selected evidence addresses the stated assertion.
Your exam workflow
- Step 1Read the requirementIdentify what the task asks you to decide about audit confirmations cpa exam.
- Step 2Sort the factsChoose the information, population, and knowledgeable confirming party based on the relevant assertion and assessed risk.
- Step 3Apply the ruleControl selection, addressing, sending, receiving, and evaluation, including the reliability implications of an intermediary.
- Step 4Check the outputFollow up a positive-request nonresponse and perform applicable alternative procedures before evaluating sufficiency.
Keep the next step narrow
Quick questions
What is the shortest useful answer for audit confirmations cpa exam?
A confirmation seeks audit evidence directly from a knowledgeable external source. The auditor selects and addresses requests, maintains control over sending and receiving them, evaluates reliability and exceptions, follows up positive-request nonresponses, and performs applicable alternative procedures before concluding on sufficiency.
How can audit confirmations cpa exam appear on the CPA Exam?
AUD can test confirmation design, positive and negative requests, auditor control, electronic intermediaries, exceptions, nonresponses, alternative procedures, and the issuer or nonissuer standard stated. The exact task can change, so identify the governing facts before applying the rule.
What is the most common mistake with audit confirmations cpa exam?
Letting the client select, send, or collect requests breaks auditor control and weakens the reliability of the process. Map every handoff and keep selection, transmission, receipt, and evaluation under auditor control.
Where should I practice audit confirmations cpa exam?
After the worked example, use AUD practice for a fresh question that requires the same decision. If the miss depends on audit evidence relevance and reliability, review that handoff before trying another set.
How should I review audit confirmations cpa exam after a missed question?
Write assertion, confirming party, request type, control path, and response state before choosing the next procedure. Rework the illustration once with an exception and once with an unreliable response instead of a nonresponse. Answer a fresh AUD confirmation question and explain why the selected evidence addresses the stated assertion.