ACCA Advanced Audit and Assurance (AAA) Practice Exam

What is required from a confirming party in a positive confirmation request?

1. To remain silent if they agree with the information

2. To provide a written response regardless of their agreement

3. To perform an internal review before responding

4. To contact the auditor via phone rather than writing

The correct answer is: To provide a written response regardless of their agreement

The requirement for a confirming party in a positive confirmation request is to provide a written response regardless of their agreement. This is essential because a positive confirmation is designed to obtain direct verification of account balances or transactions from third parties. In the context of auditing, when an auditor sends out positive confirmations, they expect the confirming party to acknowledge or deny the information presented. This written response helps ensure that the auditor receives clear and unequivocal information about whether the details are accurate, which is critical for assessing the reliability of financial statements. The nature of a positive confirmation request lies in its explicit request for a reply, which enhances the reliability of the confirmation received. Therefore, confirming parties cannot merely remain silent or assume their agreement is implied; their definitive written response verifies the provided information or indicates discrepancies, aiding the auditor in their assessment.