What it is
The main risk in accounts payable is understatement. So unlike a receivable confirmation, an AP confirmation usually does not state a balance: it asks the vendor to report what it says the entity owes, with an itemized statement. That “blank” form gives better evidence on completeness.
AU-C 505 requires the auditor to control the requests, including selecting who is confirmed and having replies sent directly to the auditor. The letter goes out on the client’s letterhead, signed by management.
When to use it
- When the search for unrecorded liabilities alone is not enough: weak controls, disputes, or significant vendors with low or zero recorded balances.
- For major suppliers, vendors with unusual activity, related party vendors and vendors with consignment or rebate arrangements.
What’s inside
- Request letter on client letterhead with direct-reply instruction
- Blank response form: balance owed, open invoices, credits and goods shipped but not invoiced
- Questions on consignment, rebates, notes and other arrangements
- Electronic reply option and auditor contact details
- Confirmation control log for the audit file
Standard cited
This template follows AU-C 505. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 505 explained.
Questions
Why confirm vendors with zero balances?
Because the concern is unrecorded liabilities. A large-volume vendor with a small or zero recorded balance is a better completeness test than a vendor whose large balance is already in the ledger.
Are AP confirmations required under US GAAS?
No. AU-C 330 requires the auditor to consider whether external confirmation procedures should be performed as substantive procedures, and AU-C 505 sets how confirmations are controlled once you use them. Confirming payables is a judgment tied to risk; the search for unrecorded liabilities and vendor statement reconciliations are common alternatives.
Related templates
- Search for Unrecorded Liabilities Workpaper
- Accounts Receivable Confirmation Letter (Positive)
- Accrued Expenses Schedule (Excel)
Last updated 11/04/2026. All free templates.