Comments by the Ad Hoc Task Force of the Auditing Standards Committee of the Auditing Section of the American Accounting Association on the Proposed Auditing Standard, the Auditor’s Use of Confirmation, and Other Proposed Amendments to PCAOB Standards

Abstract

On December 20, 2022, the Public Company Accounting Oversight Board (PCAOB) issued a request for comment on its proposed auditing standard, The Auditor’s Use of Confirmation, and Other Proposed Amendments to PCAOB Standards. The proposed auditing standard describes principles-based requirements that apply to paper-based and electronic confirmations, improves integration with risk assessment standards, requires confirmation for cash held by third parties, and carries over existing requirements regarding confirming accounts receivable. Further, it considers additional audit procedures when using negative confirmation requests and clarifies certain activities where the auditor should not use an internal auditor to provide direct assistance. The proposed standard is important, as the audit confirmation process touches nearly every audit. The comment period ended on February 20, 2023. This commentary summarizes the participating members’ views on the questions posed by the PCAOB. Data Availability: Proposed Auditing Standard—The Auditor’s Use of Confirmation, and Other Proposed Amendments to PCAOB Standards, including questions for respondents, is available at PCAOB Proposes New Standard for the Auditor’s Use of Confirmation | PCAOB (https://pcaobus.org/).