1. When the company is registered and the capital is verified, a bank confirmation letter will be issued to check whether the registered capital is in place;

2. When the company is audited, a bank confirmation letter will be issued , to see whether the book amount of the company's bank deposits is consistent with the actual amount.

When an accounting firm performs a specific audit project, based on the assessed risk of material misstatement at the level of assertions, the confirmation must be designed to cover many assertions of the audited unit.

This should include confirmation of "bank deposits, loans and other important information on transactions with financial institutions", as well as confirmation of accounts receivable and inventory. Through the form of confirmation letter, it can to a large extent increase the credibility of the determination of existence, rights and obligations.

Extended information

According to the different parties being inquired, the inquiry letter can be divided into:

1. Bank inquiry letter: deposit to the person being audited A confirmation letter issued by the bank and the borrowing bank to check the balance, existence and ownership of the bank deposits 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 inquiry letter generally includes: deposits, borrowings, account cancellations, entrusted deposits, entrusted loans, guarantees, acceptance bills, discount bills, collection notes, letters of credit, foreign exchange contracts, depository securities and other major matters.

2. Enterprise confirmation letter: A confirmation letter issued to the creditors and debtors of the auditee to check the existence, rights or obligations of the auditee's claims or debts on a specific date. Corporate confirmation letters usually include the balances of the transactions between the two parties as of a specific date.

3. Lawyer confirmation letter: A confirmation letter issued to the lawyer who provides legal services to the auditee and the law firm where he or she works, to check whether the auditee has any unresolved matters on a specific date. settlement of litigation and its possible effects, as well as settlement of attorney fees.