Required information Confirmation Procedures for Debt Read the case and answer the questions that follow. Debt transactions and accounts are often few in number but material in dollar amount. Also, lenders are eager to confirm balances, thereby assisting auditors in verifying amounts owed. As such, confirmatons provide an easy fool for obtaining excellent evidence on material batances. CONCEPT REVEW: Confirmatons, while not required for debt, are an efficient and effective way for auditors to obtain a high level of third parity evidence on material amounts and balances. Read the case. Then answer the questions based on it. BACKGPOUNP: Notes payable to financlal institutions are confirmed as part of the confimation of cash deposit balances. Standard confirmation forms include a request that the firancial institution confirm all borrowings by the depositot McGrow CPA is the auditor for Dillon Industries. a manufactures of widgets. Dillon has debt (a mortgage and line of credit) to ABC Bankthe same bank that holds its cash, lochbox, and money imaket accounts. A standard AICPA confirmation was sent to ABC Bank, asking it to cunfittr eash bulancer and debt terms and balances. The debt balances and account numbers were listed on the confirmation sent to the bank. The clients controller prepared the confirmation and maled it to the bank. The bank gave it back to the controller When he came to make the next day's deposit. The contioller then gave it to the ouditot. 1. What was wrong with filling out the debt balances and account riumbers on the confirmation? McGraw CPA is the auditor for Dillon Industries, a manufacturer of widgets. Dilion has debt (a mortgage and line of credit) to ABC Bank. the same bank that holds its cash, lockbox, and money market accounts. A standard AICPA confirmation was sent to ABC Bank, asking It to confirm cash balances and debt terms and balances. The debt balances and account numbers were listed on the confirmation sent to the bank. The client's controller prepared the confirmation and malled it to the bank. The bank gave it back to the controller when he came to make the next day's deposit. The controller then gave it to the auditor. 1. What was wrong with filling out the debt balences and account numbers on the confirmation? 2. What was wrong with the maling of the confirmation? 3. Was there a problem with the bank giving the confirmation back to the client