SA-505: External Confirmations & its Format


To give true and fair view on Financials of the company, an auditor is required to ascertain that whether such financials are free from material mis-statement or not. And to obtain a “External Confirmation” from different parties is one of the key material to ascertain such opinion.


The objective of the auditor, when using external confirmation procedures, is to design and perform such procedures to obtain relevant and reliable audit evidence.


When using external confirmation procedures, the auditor shall maintain control over external confirmation requests, including:

(a)  Determining the information to be confirmed or requested;

(b)  Selecting the appropriate confirming party;

(c)  Designing the confirmation requests, including determining that requests are properly addressed; and

(d)  Sending the requests, including follow‐up requests when applicable, to the confirming party

So, as per SA-505, to obtain external confirmation from the different vendors or suppliers is one of the core element of the audit.

While it is not necessary to obtain confirmation from all those suppliers or vendors so sampling can be done for the same. Then such confirmed balances should be tallied with the clients database/ledgers.




(Name of vendor)


Dear Sir or Madam:

Our auditors, M/s …………. are auditing our financial statements and wish to obtain direct confirmation of accounts payable to you as of March 31, 20XX. Compare the information below with your records on that date and confirm that this information agrees with your records on that date or note the details of any discrepancies in the space provided below.

Our records on March 31, 20XX showed as___________ payable to you.

And please confirm your status under the MSMED Act 2006, by ticking the relevant option below:


Manufacturing Sector
EnterprisesInvestment in plant & machinery
Micro EnterprisesDoes not exceed twenty five lakh rupees
Small EnterprisesMore than twenty five lakh rupees but does not exceed five crore rupees
Medium EnterprisesMore than five crore rupees but does not exceed ten  crore rupees
Service Sector
EnterprisesInvestment in equipments
 Micro EnterprisesDoes not exceed ten lakh rupees:
Small EnterprisesMore than  ten lakh rupees but does not exceed two crore rupees
Medium EnterprisesMore than two crore rupees but does not exceed five core rupees


Micro Enterprise               ______

Small Enterprise               ______

Medium Enterprise            ______


Please mail / fax your reply directly to our auditors at the following address.



(Firm Name)

Chartered Accountants


Fax No.:



Your prompt attention to this request will be appreciated.




For ————– Private Limited


[ Authorized Signatory ]



(Please do not detach)


 The information as stipulated above by [Name of the Company] is correct except as noted below.


Signed: _______________                        Date:    ________

Title:  ______________________         Supplier #: [insert vendor number]



Thank You

Happy Reading!!

Published by

Shushant mallik ( Chartered Accountant & Cost Accountant )

Shushant is a Chartered Accountant and a Cost Accountant. He has secured All India Rank-34 in CMA Final Exams. He is a Financial Controller at Mount Meru Soyco Limited, Rwanda. He is a administrator of this site . In his spare time he hang out with his friends and discuss about the current issues in market. You can find his latest blog posts at and at his facebook profile.

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