PCAOB Attempts to Upgrade Confirmation Standard

The Public Companies Accounting Oversight Board has proposed a confirmation standard to supercede present AU 330. Daniel Goelzer of PCAOB says that the new standard would modernize confirmation requirement, increase the focus on confirming with independent third parties and more explicity address risks of errors and frauds. Interested parties have about 60 days for public comment before the new standard is sent to the SEC for consideration.

Confirmations have been a hallmark of audits for decades now. While it is not clear how the new guidelines will put greater emphasis on independent parties; the increased focus on fraud and errors is consistent with recent auditing standards such as SAS 99.