What is the Concept of Circularization or External Confirmation Procedures in Auditing?
As part of their audit process, financial auditors implement various work that allows them to express their opinion on an entity’s annual accounts.
Among the audit procedures they design and perform, financial auditors carry out the circularization process also known as the «procedure of external confirmation».
External confirmation procedures are frequently performed for confirming or requesting information regarding account balances and their elements.
Debtors to a company are asked to confirm outstanding amounts (positive circularization) or to reply if the amount stated is incorrect, or in dispute (negative circularization).
As part of the digitization on the audit profession, and in application of the ISA* 505 “External Confirmations” (*International Standards on Auditing) standard, auditors can now use the secured and cloud-based platform, Circulariz.com to simplify external confirmations for everyone.
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