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Creditor Balance Confirmation Letter For Audit Purpose

Creditor Balance Confirmation Letter For Audit Purpose Template for Hong Kong

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Key Requirements PROMPT example:

Creditor Balance Confirmation Letter For Audit Purpose

"I need a Creditor Balance Confirmation Letter For Audit Purpose for my Hong Kong manufacturing company's annual audit, specifically to confirm a complex series of trade payables with multiple international suppliers for the financial year ending March 31, 2025."

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Document background
The Creditor Balance Confirmation Letter For Audit Purpose is a critical document used in Hong Kong's audit process to independently verify financial obligations and outstanding balances with creditors. This document is typically issued during annual statutory audits or special purpose audits, where external auditors require third-party confirmation of reported creditor balances. It serves as an essential audit evidence under Hong Kong Standards on Auditing (HKSAs), particularly HKSA 505 regarding external confirmations. The letter is designed to capture accurate financial information, including outstanding balances, payment terms, and any discrepancies between the creditor's records and the company's books. This confirmation process helps ensure compliance with Hong Kong's Companies Ordinance (Cap. 622) requirements and supports the integrity of financial statements through independent verification.
Suggested Sections

1. Letterhead and Date: Company letterhead of the auditor and current date

2. Recipient Details: Full name and address of the creditor being contacted for confirmation

3. Subject Line: Clear indication that this is a balance confirmation request for audit purposes, including the client company name and audit period

4. Introduction: Statement identifying the auditor, the client company being audited, and the purpose of the letter

5. Balance Details: Specific amount(s) to be confirmed, including the date of the balance and any relevant account numbers

6. Response Instructions: Clear instructions on how to confirm or dispute the balance, including where to send the response

7. Authorization Statement: Statement from the client company authorizing the creditor to release information to the auditors

8. Signature Block: Space for signatures from both the audit firm and the client company's authorized representative

Optional Sections

1. Statement of Account: Detailed breakdown of transactions, used when there are multiple transactions or complex account history that needs confirmation

2. Disputed Items Section: Additional section for noting any disputed items or discrepancies, included when there's a history of reconciliation issues

3. Related Party Declaration: Section for declaring any related party relationships, included when there might be related party transactions

4. Confidentiality Statement: Additional privacy and confidentiality clauses, included when dealing with sensitive information or regulatory requirements

Suggested Schedules

1. Schedule A - Account Details: Detailed listing of account balances and transactions if multiple accounts or complex transactions are involved

2. Schedule B - Transaction History: Chronological listing of significant transactions during the audit period

3. Appendix 1 - Supporting Documents: Copies of relevant invoices, statements, or other supporting documentation

4. Appendix 2 - Reply Form: Standardized form for the creditor to complete, confirm, and return

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Banking & Financial Services

Manufacturing

Retail

Professional Services

Technology

Construction

Import/Export

Healthcare

Real Estate

Logistics & Transportation

Wholesale Trade

Education

Relevant Teams

Finance

Accounting

Audit

Treasury

Accounts Payable

Financial Control

Compliance

Financial Reporting

Credit Control

Relevant Roles

External Auditor

Audit Manager

Financial Controller

Chief Financial Officer

Accounts Payable Manager

Finance Manager

Accounting Manager

Treasury Manager

Audit Partner

Senior Accountant

Compliance Officer

Financial Analyst

Credit Controller

Industries
Hong Kong Standards on Auditing (HKSAs): These standards provide the framework for conducting audits in Hong Kong, including specific requirements for external confirmations under HKSA 505
Companies Ordinance (Cap. 622): Primary legislation governing companies in Hong Kong, including requirements for accounting records, financial statements, and audit procedures
Contract Law (Common Law): Hong Kong contract law principles ensuring the confirmation letter constitutes a valid legal document between parties
Personal Data (Privacy) Ordinance (Cap. 486): Regulates the handling of personal data, relevant when sharing financial information between parties
Hong Kong Financial Reporting Standards (HKFRS): Standards that govern financial reporting in Hong Kong, ensuring consistency in how financial information is presented and confirmed
Professional Accountants Ordinance (Cap. 50): Governs the conduct of professional accountants and auditors in Hong Kong, including their duties in obtaining external confirmations
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

Find the exact document you need

Creditor Balance Confirmation Letter For Audit Purpose

A formal audit confirmation letter used in Hong Kong to verify creditor balances and financial obligations during external audits, complying with Hong Kong Standards on Auditing.

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