The balance confirmation signed by someone who had left the company eight months earlier

This is a composite, illustrative scenario, not an account of a named client. A debtor confirmation reply came back agreeing exactly with the balance on the client's books, signed by a named finance manager at the confirming company and stamped with what appeared to be that company's official seal. A routine cross-check — searching the signatory's name against the confirming company's current staff directory, prompted by nothing more specific than standard practice for confirmations above a size threshold — showed that person had left the confirming company roughly eight months before the date on the confirmation letter.

Why a matching balance was not, on its own, reassuring

A confirmation that agrees with the client's books is often treated as the end of the procedure once the amount ties out. But the figure matching doesn't establish who actually sent the reply, or whether it came from someone with authority to confirm balances on the counterparty's behalf at all. A former employee signing a confirmation raises the specific possibility that the reply did not originate from the confirming company's current finance function — it could have been drafted and returned by someone with access to old letterhead and a stamp, including, in the more concerning case, someone connected to the client being audited rather than to the counterparty.

What the follow-up established

1. 01Contacted the confirming company directly through a phone number independently sourced, not the one on the confirmation letterCurrent finance staff confirmed the named individual had indeed left roughly eight months earlier and had no continuing involvement with the company.
2. 02Asked the confirming company's current finance team whether they recognised the balance and the letterThey had no record of having sent that specific confirmation reply and could not confirm it had originated from their office.
3. 03Asked the client directly how the confirmation letter had been returnedIt had come back through the client's own postal address rather than directly to the audit firm — a deviation from the standard confirmation process, which specifies replies are to be returned directly to the auditor.
4. 04Treated the reply as unreliable and performed alternative proceduresSubsequent cash receipts from that debtor after year end were traced instead, to independently corroborate the balance without relying on the compromised confirmation.

What went into the file

• The signatory check and the confirming company's own statement that they had no record of the reply.
• The deviation from the standard direct-return confirmation process, documented explicitly as a reliability concern.
• The alternative procedure performed — subsequent cash receipts — and its result as the basis for the final conclusion on the balance.
• A firm-wide reminder, following this instance, to verify confirmation return routes and, for larger balances, the signatory's current standing before accepting a reply at face value.