Confirmations of individual accounts receivables balances directly with debtors will normally provide evidence regarding: Collectability Ownership of balances confirmed Existence of balances confirmed. Internal control over balances confirmed

Existence of the balances confirmed

Explanation:

Business customers who undertake an audit verify claims made in payable accounts data. One statement that receivable confirmations of accounts can show is the actual existence of transactions.

For instance the auditor asks a consumer to verify that the consumer has an account balance with the audited business.

A successful consumer acknowledgment supports the financial statements ' declaration of existence. Accounts receivable verifications are usually more reliable than other generic claims, such as comprehensiveness, according to the AICPA, in confirming existence assumptions.