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Microlesson · 5-min read

Meaning, Positive Confirmation, Blank Confirmation

## What is External Confirmation?

Audit evidence obtained as a direct written response to the auditor from a third party (confirming party), in paper or electronic form.

```

AUDITOR ──── Confirmation Request ────► THIRD PARTY

◄─── Direct Written Response ───

```

---

## Positive Confirmation Request

  • Confirming party responds in all cases — whether they agree OR disagree
  • Ordinarily provides reliable audit evidence

### Two Variants

TypeHow it worksTradeoff
FilledStates the amount; party confirms agreement/disagreementHigher response rate; risk that party confirms without checking
BlankDoes NOT state amount; party fills in the amountReduces risk of blind confirmation; results in lower response rates

### Risk with Positive Confirmations

A confirming party may reply without verifying that the information is correct. The blank variant mitigates this but at the cost of response rate.

Worked example

### Example 1

Auditor sends a filled positive confirmation to Debtor A: 'Please confirm that ₹3,45,000 is outstanding in your records as of 31 March.' Debtor A replies agreeing — reliable evidence obtained. If instead the letter said 'please state the balance you owe our client,' it becomes a blank positive confirmation — Debtor A must look up and fill in the amount, reducing the risk that they simply tick 'agree' without checking.

⚠️ Common exam mistakes

  • Thinking blank positive confirmations are 'more reliable' in all ways — they reduce blind-confirmation risk but produce lower response rates, which creates its own challenge
  • Assuming positive confirmations always provide conclusive evidence — a confirming party may respond without actually verifying; the auditor must remain alert to this risk
Reference: — SA 505 – External Confirmations
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