The Audit Confirmation Letter is a fundamental tool in Canadian audit practice, used when independent verification of client information is required as part of the audit evidence gathering process. This document type is specifically referenced in Canadian Auditing Standards (CAS 505) and is essential for confirming various aspects of a client's financial position, including but not limited to bank balances, accounts receivable, investment holdings, and legal matters. The letter must be drafted in compliance with provincial CPA requirements and federal privacy laws (PIPEDA), particularly when handling sensitive financial information. It serves as a formal communication channel between auditors and third parties, helping ensure the accuracy and reliability of financial statements. The confirmation process is a crucial component of the audit methodology, providing independent verification that helps auditors form their opinion on the financial statements.

1. Letterhead and Date: Auditor's firm letterhead and current date

2. Recipient Information: Full name and address of the third party being asked to confirm information

3. Client Identification: Clear identification of the audit client and the period under audit

4. Purpose Statement: Brief explanation of why the confirmation is being requested and its role in the audit process

5. Authorization Reference: Reference to the client's authorization to release information

6. Information Request: Specific details of what is being confirmed (e.g., account balances, terms of agreements, etc.)

7. Response Instructions: Clear instructions on how and where to send the confirmation response

8. Confidentiality Statement: Statement regarding the confidential nature of the information

9. Response Deadline: Specific date by which the response is required

10. Contact Information: Auditor's contact details for any questions or clarifications