What it is
A positive confirmation asks the customer to reply in every case, agreeing or disagreeing with the balance. AU-C 330 has the auditor use external confirmation for accounts receivable in response to assessed risks unless the balance is immaterial, confirmation would be ineffective, or assessed risk is low and other planned substantive procedures address it.
This letter goes out on the client’s letterhead, signed by the client, with the reply sent directly to the CPA firm.
When to use it
- Year-end audits where trade receivables are material.
- Alternative: use a blank form (customer fills in the balance) when risk is higher.
What’s inside
- Client request to the customer to confirm the balance as of the confirmation date
- Reply form with agree / disagree and space for differences
- Return instructions to the CPA firm (mail or email)
- Exceptions follow-up table for the auditor
Standard cited
This template follows AU-C 505 / AU-C 330. 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, AU-C 330 explained.
Questions
When can I skip confirming receivables?
AU-C 330 allows not confirming when receivables are immaterial, when confirmation would be ineffective, or when assessed risk is low and other planned substantive procedures address it. Document the basis if you do not confirm a material balance. For audits of periods ending on or after December 15, 2028, SAS 150 moves the rule into AU-C 505 and drops the immaterial-balance exception.
What if the customer does not reply?
Send a second request. If there is still no reply, perform alternative procedures such as examining subsequent cash receipts, shipping documents and invoices.
Related templates
- Bank Confirmation Letter (AU-C 505)
- Lead Schedule Template (Excel)
- Summary of Uncorrected Misstatements (AU-C 450)
Last updated 11/04/2026. All free templates.