As a pre-closing activity, selected suppliers are to confirm their balances. Which confirmation procedure do you use when a response is expected only in case of discrepancies?

Question

Options

• ABalance confirmation
• BAccount statement
• CBalance request
• DBalance notification

• A
  5% (1)
• B
  11% (2)
• C
  5% (1)
• D
  79% (15)

Explanation

Balance Notification (D) is correct because it is a one-way communication sent to suppliers stating the balance as recorded in the buyer's books - a reply is required only if the supplier disagrees. This mirrors what auditors call a negative confirmation: silence equals agreement.

Why the distractors are wrong:

• (A) Balance Confirmation requires the supplier to actively confirm the balance regardless of discrepancies - it demands a response in all cases (positive confirmation).
• (B) Account Statement is a document detailing transaction history used for reconciliation; it is not a formal confirmation procedure awaiting a response under specific conditions.
• (C) Balance Request asks the supplier to provide their balance figure, implying a mandatory response is expected - the opposite of a discrepancy-only reply.

Memory tip: Think of "Notification" like a postal notice - you're just telling someone something. They only need to get back to you if something is wrong. If it were a "Confirmation" or "Request," you'd be asking for something back every time.

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