What is the method of audit where the auditor corresponds directly with a third party?

The method of audit in which the auditor corresponds directly with a third party is known as external confirmation. This process involves the auditor reaching out to independent parties such as banks, customers, or suppliers to obtain verification of information. For example, when verifying account balances or outstanding debts, auditors may send confirmation requests to third parties to confirm that the information provided by the client aligns with the external records.

External confirmation is particularly valuable because it provides evidence that is not solely based on the assertions of management and helps to establish the validity and reliability of the information being audited. This method is seen as an important audit procedure as it enhances the credibility of the financial statements by corroborating the information gathered from the client with independent sources.

The other choices involve different concepts that do not specifically refer to the practice of directly communicating with third parties for verification.