The Public Company Accounting Oversight Board (PCAOB) this week approved for public comment a proposed audit standard on confirmation, which is designed to strengthen current requirements under the auditing standard, AU sec. 330, The Confirmation Process. Comments are due Sept. 13, 2010.
"The proposal would modernize the confirmation standard and strengthen its requirements to better protect investors,” said Daniel L. Goelzer, PCAOB acting chairman. “The proposed new standard would also more explicitly incorporate consideration of the risk of material misstatement due to error or fraud into the selection, design, and performance of confirmation procedures.”
On April 14, 2009, the PCAOB issued a concept release on possible revisions to the confirmation standard, which was written in the early 1990s. The PCAOB received 24 comment letters on the concept release. Additionally, revising the existing confirmation standard has been discussed with the PCAOB Standing Advisory Group.
“The proposed standard recognizes the importance of audit evidence obtained from independent third parties and, in doing so, strengthens and extends the requirements for using confirmations in the audit process,” said Martin F. Baumann, PCAOB chief auditor and director of professional standards.
Any new auditing standard that is adopted by the PCAOB will be submitted to the U.S. Securities and Exchange Commission for approval.