Bank confirmation (audit)
What is a bank confirmation in an audit, and what does it include?
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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
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A bank confirmation is the bank's direct answer to an auditor's request, given under the client's authority, of what it holds for the client at the balance date: each account and balance, each facility and its limit, the security it holds, and contingent items such as guarantees it has issued on the client's behalf. It is the auditor's independent view of the client's banking, and its value lies in what the client's own records may leave out. A bank that answers only the question asked has confirmed the balance sheet the client wrote.
BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.
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