Sir point d of negative confirmation auditor is not aware of circumstances or conditions that would cause receipients to disagree. In confirmation request layout and presentation explain letter head vs blank paragraph. And exception may provide a guide to quality of responses example.

1 answer

Ravi Staff February 22, 2018

First Doubt
SA 505 — Factors to be present before going for negative confirmation
Point (d)
” The auditor is not aware of circumstances or conditions that would cause recipients of negative confirmation requests to disregard such requests. ”
So it is not disagree as you specified, it is “disregard”
If third parties are not happy with client / boycotting client / strain in their relations etc then these guys will hesitate to reply, hence auditor should not fo for negative confirmation
Second Doubt
While designing confirmation request auditor should determine
“The layout and presentation of the confirmation request”
Layout means — which letter head, addressee , subject line, number of paragraphs and conclusion etc of letter
Presentations means deciding flow of points , example and words used to draft a letter, here confirmation request letter
Third Doubt
Exceptions may provide a guide to the quality of responses from similar confirming parties or for similar accounts.
Exceptions means information mismatch, information obtained in the form of confirmation not tallying with information in company records. 
For Example
They want to say that if there are no exceptions from area of customers it is unusual and responses may be unreliable of poor quality. Some exceptions are healthy signs as per practical and industry circumstances. On the other hand expected exceptions because of goods in transit or cash in transit again shows responses / confirmation request are reliable


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