A technique used by an auditor to obtain third-party evidence in support of information supplied by a client. For example, confirmation may be sought from a bank of balances held by a client.
Ratification refers to the official approval or confirmation by a person or entity of a previous contract or act, which would not be legally binding without such approval. It often occurs in situations where the initial agreement was not properly authorized or where further consent is essential for the agreement's enforceability.
The principle that financial information must influence decisions, offering predictive value or confirmation/correction of prior expectations. This concept is vital in both financial reporting and decision-making, encompassing relevant cost and relevant income.
