What it is
AU-C 505 sets out how the auditor designs and controls external confirmation requests. A bank confirmation asks the financial institution to confirm deposit and loan balances and other arrangements directly to the auditor.
Some banks accept confirmation requests only through an electronic platform such as Confirmation.com. Use this letter where the bank accepts paper or email requests, or as the authorization the platform asks for.
When to use it
- Year-end audits, for every bank and financial institution the client dealt with during the period.
- To confirm loans, lines of credit, letters of credit and guarantees, not just cash.
What’s inside
- Client authorization addressed to the bank
- Request to confirm deposit accounts, loans and other liabilities as of the confirmation date
- Request for other arrangements: guarantees, letters of credit, collateral, compensating balances
- Reply instructions sending the response directly to the CPA firm
- Auditor control log for sending, receiving and follow-up
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
Does AU-C 505 require bank confirmations?
Under the standards in effect today, AU-C 505 requires the auditor to keep control over any confirmation requests sent but does not itself require confirming cash; AU-C 330 requires external confirmation of accounts receivable unless an exception applies. SAS 150, effective for audits of periods ending on or after December 15, 2028, moves the receivables requirement into AU-C 505 and adds a requirement to confirm cash held by third parties, except where confirmation is impracticable or risk is low and other planned procedures address it. A firm may confirm cash and debt under its own methodology before then.
Can the client send the bank confirmation?
The client signs the authorization, but the auditor must control the request and the reply. The response must come directly to the auditor, not through the client.
What about Confirmation.com?
Many banks only respond through electronic platforms. When you use one, consider the platform’s controls and any SOC report on it, because AU-C 505 has the auditor evaluate the reliability of responses, including electronic ones.
Related templates
- Accounts Receivable Confirmation Letter (Positive)
- Bank Reconciliation Template (Excel)
- PBC List — Audit Request List (Excel)
Last updated 11/04/2026. All free templates.