External Confirmations

External confirmations are audit evidence gathered directly from a third party. The confirmation can be written or electronic, however if the confirmation is electronic the confirmation must be followed up with a phone call. There are two types of external confirmations: positive and negative. A positive confirmation warrants a response from the third party. There are different types of positive confirmations including: blank confirmations and invoice confirmations. A negative confirmation only requires a response if the information is incorrect.
A positive confirmation is considered more reliable. The third party is asked to respond to a positive confirmation whether the material is correct or incorrect, with a negative confirmation the third