bank confirmation letter

A business may have more than one bank account (e.g. an overdraft, a current account and a deposit account) with more than one bank (e.g. because it has different branches in different locations and each branch uses a different local bank). If you refer to Chapter 21 of our notes you will see that requesting confirmation of y/e balances is a standard audit procedure. The balance(s) in the confirmation should confirm the balances per the bank statement(s) which are the starting point for the reconciliation of each bank balance.

Yes Yes You are absolutely NOT checking whether the bank "got it wrong" - it is not the banking organisation that you are auditing but the client who has an account with the bank. The auditor obtains the bank confirmation directly from the bank because that is more reliable evidence (direct/written/external) than the bank statement which is held by the client (indirect/written/internal). To verify the reconciliation the auditor has to confirm the "start" point - and the bank confirmation provides the "best" (as in most reliable) evidence of this.