You are engaged to audit the financial statements of a central school district. The district has an elected treasurer and a clerk of the board of education who is appointed by the board. Each of these officers keeps independent accounts with regard to the monies received and with regard to disbursements authorized from the school bank accounts. During the course of your audit you learn that the treasurer of the school district is one of the principal employees in the same branch of the bank. You have sent to this bank, in which various accounts are carried for the school district, your regular form for confirmation of bank balances and for confirmation of liabilities, and they have been received back by you properly filled out and signed for the bank by its manager, who also is the treasurer of the school district.

All information in the confirmations appears to be correct in accordance with the records which you are examining. Discuss the value of these confirmations in these circumstances. What further steps, if any, would you take with regard to these confirmations?