CA T, the statutory auditor of a company, is in the process of designing external confirmation requests to be sent to trade receivables outstanding…

The design of a confirmation request may directly affect the confirmation response rate, and the reliability and the nature of the audit evidence obtained from responses. Therefore, designing a proper confirmation request by auditor is necessary. Factors to be considered when designing confirmation requests include: The assertions being addressed.Specific identified risks of material misstatement, including fraud risks.The layout and presentation of the confirmation request.Prior experience on the audit or similar engagements.The method of communication (for example, in paper form, or by electronic or other medium).Management's authorisation or encouragement to the confirming parties to respond to the auditor. Confirming parties may only be willing to respond to a confirmation request containing management's authorisation.The ability of the intended confirming party to confirm or provide the requested information (for example, individual invoice amount versus total balance).