Statements on inditing No. 18
AS the war progresses an increasing percentage of the receivables of companies are represented by amounts recorded as due from departments or agencies of the United States Government. These departments and agencies, under existing war conditions, rarely confirm amounts stated in requests for confirmation and have frequently expressed their inability to do so. As a result such con-firmation in most instances cannot be considered practicable at the present time.
In the opinion of the committee, the use of the "negative" type requests in confirming amounts due from government departments or agencies would not, under present conditions, constitute com-pliance with the spirit of "Extensions of Auditing Procedure." That report did not contemplate that the "negative" form would be used if the independent public accountant had reason to believe that the request would fail to receive consideration and that he would not be advised if the amount stated in the request differed from the amount shown on the debtor's records. Some public accountants may continue to send "positive" type requests for confirmation of receivables from government departments and agencies in the hope that, in some cases, replies may be received. Other public accoun-tants have indicated that they believe the number of replies received to such request, stating either agreement or disagreement with the amount shown on the clients' records, will be so few as not to war-rant continuation of the sending out of "positive" type requests for confirmation.
In any case in which receivables from government agencies or departments represent a significant proportion of the current assets or of the total assets of a concern and confirmation thereof by direct communication with the debtors has not been accomplished, dis-
Issued by the Committee on Auditing Procedure, American Institute of Accountants, 13 East 41st Street, New York 17, N. Y.
Copyright 1943 by American Institute of Accountants
Confirmation of Receivables from the Government