PCAOB Releases Spotlight on the Use of a Service Provider in the Confirmation Process

Today the PCAOB released a new Spotlight publication, “Observations and Reminders on the Use of a Service Provider in the Confirmation Process(PDF).”

Many audit firms rely on a service provider to send and receive electronic audit confirmations to and from “confirming parties,” such as financial institutions, investment and brokerage firms, and law firms.

We observed diverse practices related to the procedures auditors perform to support such reliance. In some cases, audit firms were not giving any consideration to support whether, as required by PCAOB standards, the auditor maintains control over the confirmation requests and responses in audits where a service provider is used to send and receive confirmations. 

This Spotlight shares observations and suggested procedures for auditors, who may find this information valuable as they plan and perform audits.

***** 

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.