PCAOB Proposes New Standard for the Auditor’s Use of Confirmation

Advancing a PCAOB strategic goal of modernizing standards, proposal would replace an interim standard that hasn’t changed substantially since 2003

Washington, DC, Dec. 20, 2022

The Public Company Accounting Oversight Board (PCAOB) today issued for public comment a proposed new standard that, if adopted, would strengthen and modernize the requirements for the auditor’s use of confirmation. The Board requests public comment on the proposal by February 20, 2023.

To modernize the PCAOB’s confirmation standard, the proposed standard includes principles-based requirements that would apply to all methods of confirmation, including paper-based and electronic communications. The proposal, if adopted, would better integrate the PCAOB’s confirmation standard with its risk assessment standards.

During times of economic uncertainty, the risk of fraud is heightened, and auditors have to be more vigilant than ever,” said PCAOB Chair Erica Y. Williams. “When done right, confirmation can be a critical tool to help auditors combat fraud and keep investors protected.”

The confirmation process touches nearly every audit. It involves an auditor sending a confirmation request directly to a confirming party (e.g., a financial institution), evaluating the information received, and addressing nonresponses and incomplete responses to obtain audit evidence about one or more financial statement assertions.

When properly designed and executed, confirmation can be a critical part of the evidence that auditors obtain to support their opinion regarding a company’s financial statements. A properly designed and executed confirmation can also be an important response for auditors to address fraud risks.

Detailed questions are included throughout the proposal, and commenters are encouraged to (1) comment on any or all topics, (2) respond to any or all questions, (3) provide feedback in areas not covered by specific questions, and (4) provide any evidence that informs commenters’ views.

The public can learn more about submitting comments on proposed PCAOB rules at the Rulemaking Docket page. For more information regarding the PCAOB’s standard-setting activity, visit our Standards page.


About the PCAOB 

The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The PCAOB also oversees the audits of brokers and dealers, including compliance reports filed pursuant to federal securities laws. 


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