What to Do When Positive Confirmation Requests Go Unanswered

When an auditor sends out positive requests for confirmations and receives silence in return, it can feel like a punch to the gut. What’s the next step? While it might seem tempting to overlook the missed responses, that's not the route to take. So, what's a CPA to do? The right approach here is to ask the client to contact customers and retrieve those confirmations. This method doesn’t just show diligence—it's vital for upholding the integrity of the entire audit process.

Let's unpack this a bit. Confirmations are seriously important pieces of audit evidence, playing a key role in verifying the existence and accuracy of account balances and transactions. Think of it like double-checking your grocery list—if you can’t confirm what you put in the basket, it raises a flag, right? The same goes with the financial documents you're auditing!

When those positive confirmations go unanswered, it creates a red flag about the reliability of the information you’re working with. So, how does reaching out to customers help? Well, by prompting the client to follow up, you might just uncover oversights—those customers may have simply missed your initial request. It’s a proactive step, one that not only keeps the audit wheels turning but also strengthens your role as a trusted advisor.

Now, consider the alternatives: ignoring those confirmations is like throwing your hands up in defeat. Not only does that undermine your credibility, but it could lead to major issues down the road. Similarly, raising detection risk without further investigation? That' like tossing a coin and hoping for the best; it’s a gamble nobody wants to take when financial integrity is on the line.

Documenting the situation can certainly have its place in the audit process, but the immediate action of involving the client is paramount. It’s about getting the answers you need and reinforcing the commitment to accuracy and integrity in the financial statements.

In the ever-evolving world of audits, maintaining a proactive stance in the face of challenges—like unanswered confirmations—can really be the difference between a mediocre audit and one that truly upholds the standard of excellence. Remember, the key is not just to seek confirmations but to do it in a way that actively engages all stakeholders involved. What’s your next move?