To support supplier account balances, which method is the most conclusive?

Obtaining confirmations of balances from suppliers is considered the most conclusive method for supporting supplier account balances because it involves a direct communication with the external party— the supplier. This approach allows the auditor to verify the accuracy of the recorded account balances against independent evidence, which is less prone to bias or error than internal documentation.

When auditors confirm balances, they send out requests to suppliers to confirm the amounts that they agree are owed. This process usually yields reliable information because suppliers have no vested interest in altering the truth of what is owed to them. As a result, confirmations provide strong external evidence to support the accuracy of the accounts payable balances reported by the business.

In contrast, the other methods listed primarily rely on internal documentation or interviews, which can introduce a higher risk of misstatement. Reviewing vendor statements from the accounts payable clerk may be informative but lacks the independence needed to validate balances conclusively. Performing account analysis, while it can identify discrepancies, does not provide direct third-party evidence and can be subject to interpretation. Interviewing the accounts payable manager, though potentially useful in understanding processes or gaining insights, does not verify account balances against any external confirmations. Therefore, confirming balances with suppliers stands out as the most effective and reliable method.