But there was some pushback by audit firms at the time, saying the proposal was too prescriptive. 2010-003, Proposed Auditing Standard Related to Confirmation. The PCAOB first issued a concept release in 2009 and followed up with a proposal in 2010 in Release No. Over the years, the PCAOB revised some of the interim standards while others have remained unchanged, such as AS 2310. After the PCAOB was established two decades ago, the board on an interim basis adopted AICPA standards that auditors of public companies must use. For example, existing AS 2310 references fax, which most businesses have stopped using more than a decade ago. AS 2310 requires auditors to maintain control over the confirmation requests and responses during the confirmation process.īut AS 2310 is an old AICPA standard that became effective in 1992 when electronic communications were far less advanced than are today. 2310, The Confirmation Process, and the PCAOB wants to replace it in its entirety with a new standard, AS 2310, The Auditor’s Use of Confirmation. The standard in question is Auditing Standards (AS) No. The proposal covers five main areas: auditors would need to confirm a company’s cash and cash equivalents held by third parties the existing requirement would also cover accounts receivable with some differences negative confirmation would be insufficient more illustrative examples when alternative procedures can be performed and more clarity on the role of internal auditors in the confirmation process. The standard would also strengthen confirmation procedures to better help prevent fraud. The proposal would better reflect today’s business environment and the increasing use of sophisticated technology that was not available when the current standard was written three decades ago. ![]() It is intended to make sure that the information in the financial statements is accurate. ![]() Confirmation is a technique that auditors use to obtain or verify information about a company by inquiring a source outside the company. 20, 2022, voted unanimously to issue another proposal for comment. More than a dozen years after the Public Company Accounting Oversight Board (PCAOB) issued a rule proposal on audit confirmations, the board on Dec.
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