PCAOB Issues Concept Release on Possible Revisions to the Standard on Audit Confirmations

The Public Company Accounting Oversight Board today voted to issue for public comment a concept release on possible revisions to the standard on audit confirmations, AU sec. 330, The Confirmation Process.

Confirmation is an audit process by which an auditor obtains and evaluates a direct communication from a knowledgeable third party in response to a request for information regarding account balances, transactions or other items that comprise a company's financial statements. Confirmations may be an important source of the evidence auditors obtain as part of an audit of a public company's financial statements.

The Board is issuing this concept release to seek public comment on the potential direction of a standard-setting project that could result in an amendment to, or a new auditing standard on, the Board's current standard on audit confirmations.

"The audit confirmation continues to be an important tool in conducting an effective and quality audit," said PCAOB Chairman Mark W. Olson. "It is important today to update the standard on confirmations given the significant advances in technology and methods of communication. This concept release will provide additional transparency to the public and allow for early input regarding the Board’s direction in considering a new standard."

The Board is seeking comment on the concept release for a 45-day period.