The difference between a bank statement and a bank confirmation

Bank confirmation.

Generally, an accounting firm, a court or other unit in the investigation of a specific object, a document containing the unit's financial situation, by the bank seal to confirm. A bank confirmation letter is to send a letter to the bank confirming bank deposits, bank loans, escrows**, and notes payable.

In other cases, financial institutions shall follow the Ministry of Finance and the People's Bank of China.

The relevant documents require a corroborative response.

Bank statements.

It is a detailed statement of deposit and withdrawal of funds issued by the bank.

As a common procedure and method in auditing, confirmation includes inquiries and confirmations. An inquiry is a method by which an auditor makes a written or oral inquiry to a person concerned to obtain audit evidence. Confirmation refers to a method in which the auditor sends a letter to a third party for confirmation in order to confirm the matters contained in the accounting records of the audited unit.

Classification of confirmations:

According to the different witnesses being consulted, the confirmation letter can be divided into:

1. Bank confirmation letter: a confirmation letter issued to the deposit bank and borrowing bank of the auditee to check the balance, existence and ownership of the bank deposit of the auditee on a specific date (generally the balance sheet date, the same below), as well as the balance, completeness and valuation of the loan. A complete bank confirmation letter generally includes:

Deposits, loans, account cancellation, entrusted deposits, entrusted loans.

Guarantees, acceptance bills, discount bills, collection notes, letters of credit, foreign exchange contracts, deposits** and other major matters.

2. Enterprise confirmation letter: a confirmation letter issued to the creditors and debtors of the auditee to check the existence and rights or obligations of the auditee's claims or debts on a specific date. A business confirmation letter usually includes the balance of the transactions between the parties as of a specific date.

3. Lawyer's confirmation letter: a confirmation letter issued to the lawyer who provides legal services to the auditee and his law firm to check whether the auditee has any pending litigation and its possible impact on a specific date and the settlement of the lawyer's fee.

4. Other confirmation letters: to other institutions such as insurance companies and ** exchanges.

or a confirmation letter issued by a relevant department to check the terms of the insurance contract, negotiable ** or registered capital held by the auditee.

situation, etc.

All of them are external evidence, but the confirmation letter is more probative than the statement.

Because a confirmation is audit evidence obtained by a CPA after independently performing an audit procedure, while a bank statement is a type of evidence issued by a bank, the former is more reliable.

You can also add:

1. Go to the bank in person to print the bank statement.

2. When printing the statement, it is recommended to print all the flow notes and check them.

3. Find out the reason for the discrepancy and check with the bank to see if there is any omission in the bank's reply, which occasionally occurs in practice.

It also depends on whether the substitution meets the requirements of the auditing standards. At the same time, if the letter is not sent, the other party will not replace the letter, because now the fraud of the audited unit is becoming more and more rampant, so in order to improve the implementation of the audit procedure, it is necessary to carry out the necessary alternative procedures.

The reply business of confirmation letter refers to the fact that our bank accepts the entrustment of the client (i.e., the letter unit) to investigate and verify the matters contained in the Bank Confirmation Letter, and replies to the letter designated by the letter in the form of the original Credit Certificate or Bank Confirmation Letter.

The explanations of the unit being consulted and the unit being confirmed are as follows:

The confirmee refers to the corporate customer of our bank who entrusts the confirmatory unit to send a letter to our bank to confirm the credit status of the business transactions with our bank in order to meet the external audit, evaluation and other business needs.

The confirmation unit refers to the accounting firm that sends a letter to our bank in the name of the confirmed entity in order to meet the needs of auditing, evaluation and other business or work, and asks our bank to reply to the letter by confirming the business relationship between the confirmed entity and our bank.

Bank confirmation letter refers to the written confirmation document issued by an accounting (auditing) firm to the bank in the name of the audited enterprise in the process of performing the audit to verify whether the bank deposits and loans, the capital contribution of investors (shareholders), and other matters such as guarantees, commitments, letters of credit, letters of guarantee and other matters are true, legal and complete.

A complete bank confirmation letter generally includes: deposits, loans, account cancellation, entrusted deposits, entrusted loans, guarantees, acceptance bills, discount bills, collection notes, letters of credit, foreign exchange contracts, depository** and other major matters.

Bank confirmation letter refers to the written document issued by the accounting (auditing) firm to the bank in the name of the audited enterprise in the process of performing the audit, which is used to verify whether the bank deposits and loans, the capital contribution of investors (shareholders) of the enterprise, and other matters such as guarantees, commitments, letters of credit, letters of guarantee and other matters are true, legal and complete.

Borrow: Administrative Expenses - Office Expenses, Credit: Bank Deposits.

Bank confirmation letter refers to the written confirmation document issued by the accounting firm to the bank in the name of the audited enterprise in the process of performing the audit to verify whether the deposit and loan of the bank chain of the enterprise, the capital contribution of the investor, and other matters such as guarantees, commitments, letters of credit, letters of guarantee and other matters are true, legal and complete. The purpose of issuing a bank confirmation letter is to verify the true balance of the bank deposit and, more importantly, to reveal whether the business is concealing the bank's loans.

The gist of a bank confirmation.

1. Distinguish between the confirmation of the bank balance and the confirmation of the amount of the bank. The balance is the final result of all the amounts incurred before a certain cut-off point, and it can be confirmed whether the bank balance as of a certain point in time is true by confirming the bank balance. The amount incurred is the original record at the time of the transaction, and the amount of the bank can be confirmed by confirming whether a certain banking transaction has actually occurred.

For example, when verifying that the investor invests with monetary funds, the confirmation letter of the bank is a confirmation of the amount incurred by the bank. In the case of an audit of the bank deposit items listed in the balance sheet, the bank confirmation is a confirmation of the bank balance.

2. Sign the seal correctly. The sender should sign the official seal. The reply party shall, according to the actual situation, sign the official seal of the unit Wang Tsai in the "data proves correct" and "data inconsistency and matters that need to be explained", and the handling personnel sign or seal.

The official seal of the internal organization of the unit cannot be replaced by the official seal of the unit.

3. Fill in truthfully and reply in a timely manner. The sender shall fill in the information truthfully according to the account books and records of the unit, and the financial institution that is the party to the reply shall check the original records, fill in the items of the bank confirmation letter one by one, reply to the accounting firm in a timely manner after filling in, and collect the confirmation fee from the sender in accordance with the relevant regulations.

4. Pay attention to the scope of bank confirmation. Bank confirmations include not only banks with balances at a cut-off point, but also accounts for deposits, borrowings, escrows**, and bills payable. Because it is possible that the deposit account has been closed, but there are still bank borrowings or other liabilities; It is also possible that the borrowing account has been closed but there is still unpaid interest.

5. The confirmation procedure should be appropriate. After the certified public accountant writes the confirmation letter and submits it to the audited unit for sealing, he should personally send the confirmation letter, and should not hand over the confirmation letter to the customer.

6. The working paper of the confirmation should be complete. The list of bank confirmations, copies of postage receipts for sending confirmation letters, and work records of on-site confirmation at the bank should be complete and attached to the bank's relevant project approval form. The correct use of bank confirmation letter is of great significance to improve the quality of accounting information and ensure the authenticity and integrity of relevant items of the bank.