The American Institute of CPAs’ Auditing Standards Board approved a standards update on Thursday that aims to modernize how CPAs obtain audit evidence through external confirmation procedures.
The new Statement on Auditing Standards: External Confirmations introduces a new requirement for the auditor to use external confirmation procedures for cash and cash equivalents held by third parties unless certain conditions exist, according to the AICPA.
It also provides updates to reflect the increasingly widespread use of intermediaries in external confirmation procedures.
In addition, the revisions require certain new conditions be met when using negative confirmations.
One key change, according to the AICPA, is that the new standard provides guidance regarding directly accessing information maintained by a knowledgeable external source as a means of satisfying requirements related to external confirmation procedures.
“External confirmations remain a critical source of reliable audit evidence, and these updates are designed to strengthen that foundation in today’s increasingly digital and intermediary-driven environment,” Jen Burns, chief auditor with the AICPA, said in a statement on May 14.
The new SAS, expected to be available in July on aicpa-cima.com, will be effective for firms on Dec. 15, 2028, although early adoption is possible.
Click here to view the standard once published.
Also, the comment period is closing soon to provide input on the Auditing Standards Board’s proposed changes to attestation standards.
An exposure draft of the proposed changes—Proposed Statement on Standards for Attestation Engagements, Common Concepts, Examination Engagements, Review Engagements, and Engagements to Report on Sustainability Information—can be found here.
The AICPA says the proposed changes reflect the ongoing evolution in attestation services, in which practitioners are increasingly asked to provide services beyond audits of the financial statements, such as in the areas of sustainability, digital assets, cybersecurity, governance, and related controls.
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The comment period ends June 30, 2026. The Auditing Standards Board requests that respondents download the online survey and submit their comments to commentletters@aicpa-cima.com.
Photo credit: AICPA/Instagram
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