A confirmation is a letter sent by an outside auditor to the suppliers and customers of a client, asking them to verify the payable and receivable balances associated with them in the client’s financial records. This information is considered quite valuable by the auditor, since it provides independent confirmation of certain information in a client’s balance sheet. The auditor sends a positive confirmation letter when requesting that recipients return a response even when they agree with the provided information. The auditor sends a negative confirmation letter when requesting that recipients only return a response when they disagree with the provided information.
In securities trading, a confirmation is a written acknowledgment by a broker that a trade has been completed.