Bank Audit Letter Requests - A Reminder
Confirmation of bank balances and other information relevant to banking relationships are indicated in the ISA as typical situations where external confirmations provide relevant audit evidence.
At the planning stage of the audit the auditor should consider whether obtaining a bank report would be necessary and what banking information would need to be confirmed. Such assessment should be made on the basis of the banking facilities used by the audited entity, which would have either been outlined in an annual bank facilities letter or confirmed by the entity’s management.
In general, in view of the importance of cash to an entity’s business and its susceptibility to fraud, the auditor will conclude that a bank report for account balances, facilities and securities will be necessary as it would not be possible to obtain sufficient appropriate audit evidence from other sources.
Practice Note (PN) 16 Bank reports for audit purposes in the United Kingdom (Revised), which was revised in February 2011, outlines the procedures agreed between the UK auditing profession and the British Bankers Association (BBA) when requesting bank reports.
In accordance with the agreed procedures auditors are required to:
- provide the customer's main sort code and account number for each legal entity on their report request and a facility account number for trade finance or derivative and commodity trading information (if required);
- make sure that requests reach the bank at least one month before the period end date;
- address the request to the specific processing centre identified by each bank and not to the client’s relationship manager.
There are three specially designed request templates:
- standard – inc. option to request additional info on trade finance and derivative & commodity trading;
- fast-track – only to be used in circumstances whereby the reporting deadline is a month or less after the year end/ audit confirmation date;
- incomplete information – to be used only exceptional circumstances and the bank's response may take longer than usual to process.
You can download the templates for the request letters.
Additional guidance is available from ACCA’s website including a link to the BBA’s list of bank processing centres.