Answer:

The given question AICPA Confirmation relates to third party confirmation while performing Audit of Accounts.

1. While requesting for balance confirmation certificate from third party like banks, the balance confirmation letter may contain (but not necessarily) Account numbers maintainted with banks but balance amount as bank may do a favor for his customer by confirming the amount as mentioned in the confirmation letter. The cofirmation letter should has been sent without debt balance. In this case mentioning debt balance and account number on the confirmation is wrong.

2. As per Generally Accepted Auditing Standard on third party balance confirmation, balance confirmation request should be sent to third party like bank by the auditee with a request to confirm the balances with them directly to his Auditor.

In present case confirmation has been prepared by client's controller and mailed to bank but the same should has been prepared and directly mailed by ABC Bank to the Auditor.

3. Yes, as said above the bank has erred in giving the confirmation back to the client instead of to the Auditor as there are chances that the client may manipulate the balance of confirmation before giving it to the Auditor.