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Audit Confirmation Tracker for AR and Legal
Every request routed to whoever may send it, with the fallback procedure and its evidence attached before the first letter goes out.
River's audit confirmation tracker reads the request list your auditor sent and splits it by who is allowed to send each item. Bank and customer confirmations are the auditor's to issue and to receive, so your rows carry a reachable contact and the fallback evidence rather than a chase date. The letters to your lawyers are yours to send, so those rows carry the litigation list and the unasserted claims only you can describe. Every row also states why it might not come back.
A downloadable confirmation log gives you a status column and a follow-up date, which is the wrong shape twice over. It assumes you are the one chasing, and on most rows you are not. It also treats silence as a gap to close later, when silence is a procedure with its own evidence requirement and a document you could pull today. This inverts that order, so the fallback is filled in before the request goes out, and the balance sheet substantiation pack already holds much of what it asks for.
Written for the controller or accounting manager running their side of an audit, and for the fractional CFO who inherits fieldwork that is already two weeks late. Reach for it the day the request list arrives, not the day the first chase email goes out. It sits alongside the monthly close pack that produced the balances being confirmed, and the segregation of duties review your auditor will ask for in the same fieldwork window.
Most of these rows are not yours to send
The rule that reshapes this whole exercise is short. PCAOB AS 2310 requires that the auditor select the items, send the requests and receive the responses, directly to and from the confirming party. If a response arrives at anyone else, including you, the auditor has to ask for it again and otherwise treats the item as a nonresponse. So the useful thing a client does here is not chasing. It is supplying a contact somebody can actually reach and the evidence for the ones who never reply.
Meridian Cold Chain, a refrigerated 3PL, has 6,842,000 of receivables across 214 accounts. The auditor selects 40 of them, 5,214,000, or 76 percent of the balance. Last year 19 of 34 came back. Sorting this year's 40 by contact quality explains why: 21 pay through an AP portal, bounce, or list only a lockbox, and that group answered 4 of 14 last year. Twenty responses expected, twenty not, leaving 2,836,000 unconfirmed. Pulling evidence for those twenty is 222 documents rather than 411.
The legal rows run on the opposite rule. AS 2505 has the auditor ask management to send the letter of inquiry, carrying a list management prepared of unasserted claims it judges probable of assertion. Nobody else can write that. The bank rows have their own trap. That same confirmation standard asks the auditor to consider other financial relationships at those institutions, and lines of credit, guarantees and compensating balances appear nowhere on a list of cash balances. Meridian's cash list named four banks; its debt schedule named a fifth.
How it works
Add the request list
Whatever the auditor sent, in whatever shape: a PBC schedule, an email thread, a spreadsheet tab.
Add last year's outcome
How many came back, which counterparties never answer, and which of them only accept portal traffic.
River sorts and ranks
Rows split by who may send them, then the auditor's rows ranked by their likelihood of silence.
Pull the fallbacks first
The evidence for the rows above the line gets listed, so you gather it before fieldwork starts.
What you get
- Every row labelled with who may send it, because on most rows that is not you
- The fallback procedure named per row, with its evidence listed before the request goes
- Contacts checked against something other than the ledger record the invoice was mailed to
- A predicted response rate per counterparty, read off your own remittance and portal history
- The litigation and unasserted-claim lists your lawyers' letter has to carry, drafted for review
- A bank section built from the debt schedule and the lease file, not the cash accounts
Common questions
My auditor asked me to send the customer confirmations. Should I?
Ask them to reread their own standard. AS 2310 puts selecting, sending and receiving on the auditor, and a response that reaches you instead of them is treated as a nonresponse. What you can usefully do is give them a contact who will answer and the fallback evidence for the ones who will not.
Half our customers pay through Coupa or Ariba. Will they confirm?
Usually not, and that is worth predicting rather than discovering in week four. An AP function that only processes invoices through a portal has nobody reading free-form mail about a balance. Those accounts go straight onto the fallback list, where subsequent cash receipts and delivery documents do the work instead.
What counts as an alternative procedure for a receivable?
The standard names subsequent cash receipts compared against the invoices being paid, shipping documents, and other support such as purchase orders or signed contracts. In the Meridian example 61 of 74 invoices had already cleared, so most rows take the cash-receipt route and the bank statement importer supplies the matching lines.
We are a private company. Do PCAOB standards even apply to us?
Not directly. PCAOB standards govern audits of public companies, and a private-company audit runs under the AICPA's. AS 2310 is quoted here because it states the control rule in public, current, quotable text. The practical answer does not change: a confirmation that arrives at your desk rather than your auditor's is worth nothing to them.
What actually goes in the letter to our lawyers?
Two lists you write, not them. AS 2505 has management describe and evaluate the pending matters, then separately describe the unasserted claims it considers probable of assertion. The second is the field everybody leaves blank, because writing it down feels like creating the exposure. It gets drafted here for your counsel to correct.
Which bank confirmations do people forget?
The relationships that are not cash. A line of credit drawn to zero at year end, a standby letter of credit securing a lease, guarantees, compensating balance arrangements. Build that section from the debt schedule and the lease file, then check it against whatever the covenant definition extractor pulled out of the credit agreement.
Does this help when the auditor is confirming contract terms?
Yes, and that is the request people least expect. Where an auditor tests the terms of a transaction, the fallback is inspecting the signed contract and its amendments and verifying significant terms with the other parties involved. Side letters are what that finds, which is also what the ASC 606 contract memo is looking for.
Audit Confirmation Tracker for AR and Legal
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