Debtors (Subject to Cofirmation)

This query is : Resolved

Rahul (Querist)
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07 May 2009 Dear Members,

In many balance sheets I observe a line always attached with debtors in schedule
i.e (Debtors are subject to confirmation).

May I know the source from where the auditor or management got right to attach this line.

Please reply ASAP.

Regards,
CA Rahul

Vipul J. Bhavsar

Vipul J. Bhavsar (Expert)
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07 May 2009 Nobody has given the right to Auditor/Management to write or include such statement in the Auditors Report. Actually it is "Obligation" on their(auditor/management) part to state whether the balances shown under the head Debtors/Creditors are confirmed with them or not.e.g If Rs.1 lacs is shown under debtors but the debtors is denying it,then this would show a wrong picture to the shareholders. Hence, in order to give correct information, if the balances are not confirmed it is shown by way of note as mentioned by you.