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Cash and receivable confirmations, and UCC searches.

The standards that call for them, then the documents themselves: bank confirmations, customer confirmations with a repeatable sample, and the UCC information request — formatted, downloaded as Word, with a control log to track every one out and back. Free, and it runs in your browser.

Use at your own risk. This free tool is provided as is, without warranty, and is not accounting, legal or tax advice. All of the work a CPA performs is subject to that person’s or firm’s judgment. Do your own research and verify that the checklist or protocol you are using is valid and up to date. Built from public sources — see the sources and the terms of use.

The standards first

What GAAP says the balance must be, and what the audit has to do about it.

The Codification decides what cash, receivables and liens mean on the balance sheet and in the notes. The auditing standards decide when a confirmation or a search is required and how it is controlled. Here is where each one is.

Cash

GAAP — the ASC

  • ASC 305-10 — cash and cash equivalents; equivalents are short-term, highly liquid investments, generally with original maturities of three months or less (305-10-20).
  • ASC 230-10-45-4 and 50-8 — restricted cash is included with cash in the cash flow statement, and the nature of the restrictions is disclosed.
  • ASC 825-10-50-20 to 50-22 — concentrations of credit risk, including deposits above insured limits.
  • ASC 470-10-50 and 440-10-50-1 — the loans, lines of credit and pledged assets a bank confirmation also asks about.

The audit

  • AU-C 505 — external confirmations: the auditor controls the requests and the replies, and deals with management refusals, nonresponses and exceptions.
  • AU-C 330.19 — consider whether to use confirmations as substantive procedures. An ASB proposal would require cash held by third parties to be confirmed (proposed for periods ending on or after December 15, 2027) — check whether it has been issued.
  • PCAOB AS 2310.24 — for an issuer, confirm cash held by third parties, or obtain the evidence by directly accessing a knowledgeable external source. Effective for fiscal years ending on or after June 15, 2025.

Accounts receivable

GAAP — the ASC

  • ASC 310-10 — receivables; ASC 606-10-45-4 — a receivable is an unconditional right to consideration, distinct from a contract asset.
  • ASC 326-20 — the allowance for expected credit losses.
  • ASC 860-10 and 860-30 — receivables sold, factored, or pledged as collateral.
  • ASC 850-10-50 — receivables from related parties.

The audit

  • AU-C 330.20 — confirm accounts receivable unless the balance is immaterial, confirmation would be ineffective, or the assessed risk is low and other substantive procedures address it.
  • AU-C 505.12 and 505.15 — alternative procedures for nonresponses; negative confirmations alone only when the risk is low, the balances small and homogeneous, few exceptions are expected, and nothing suggests recipients will ignore them.
  • PCAOB AS 2310.24 and .12–.13 — for an issuer, confirm receivables (or access the evidence directly); negative requests alone are not sufficient.

UCC searches

GAAP — the ASC

  • ASC 440-10-50-1 — assets mortgaged, pledged or otherwise subject to lien, their approximate amount, and the obligations they secure (as amended by ASU 2023-06; Regulation S-X 4-08(b) for issuers).
  • ASC 470-10-50 — debt terms; ASC 460-10-50 — guarantees a search can turn up.
  • ASC 860-30 — collateral in secured borrowings; ASC 450-20 — contingencies.

The audit and the law

  • No auditing standard names the UCC search. It is the practical test of completeness for debt and liens under AU-C 330 and AS 2301, and it is evidence from an independent source (AU-C 500).
  • UCC §§ 9-301 and 9-307 — search where the debtor is located: a corporation, LLC or limited partnership in its state of organization; an individual in the state of principal residence.
  • UCC §§ 9-503 and 9-506 — search the exact legal name; a filing a search under the correct name would not find is seriously misleading.
  • UCC § 9-523 — the filing office answers search requests; most accept the national UCC 11 information request or search online.

References are to the FASB Accounting Standards Codification, the AICPA’s clarified auditing standards, the PCAOB’s auditing standards and the Uniform Commercial Code as adopted by the states. Check them against the current text before relying on them.

Prepare the documents

Fill it in once. Every letter comes out formatted.

One letter per bank, one per customer selected, and the UCC information request — on the client’s letterhead where the client signs, and on yours where you do. Download them as one Word document, and the control log as an Excel workbook. Nothing you enter leaves your computer.

The engagement

Banks and other financial institutions

One letter for each. Most banks now answer only through an electronic confirmation service; the signed letter is still the client’s authorization and the record of what was asked.

Highlighted text is still to be filled in. Send the requests yourself and have the replies come back to you: the auditor, not the client, controls every confirmation (AU-C 505.7).