PCAOB Adopts New Standard Modernizing Audit Confirmations to Better Protect Investors

By Rachel DiDio, CPA, Victor Peña, CPA, CGMA, Jonathan Zuckerman, CPA, Ioanna Vavasis, CPA,
and Edward Lentini, CPA

On September 28, 2023, the Public Company Accounting Oversight Board (PCAOB) adopted a new standard, AS 2310, The Auditor’s Use of Confirmation, and conforming amendments. On December 1, 2023, the new standard and conforming amendments were approved by the SEC. The new standard will take effect for audits of financial statements for fiscal years ending on or after June 15, 2025. 


The new standard reflects changes in technology, communications and business practices since the initial standard was implemented by the PCAOB in 2003. The updated standard will better protect investors by procedures that enhance an auditor’s ability to identify fraud in certain circumstances and improve overall audit quality.

“The new standard will help auditors detect fraud and better protect investors. By replacing a confirmation standard that had not changed significantly since faxes were a regular form of communication, the Board has taken an important step in modernizing our standards to effectively protect investors in today’s world,” said PCAOB Chair Erica Y. Williams.

Key Provisions of the New Standard

The new standard implements the following key provisions:

  • Requires confirmation of cash and cash equivalents held by third parties or acquisition of relevant and reliable audit evidence through information maintained by knowledgeable outside sources.

  • Maintains the existing requirement regarding confirmation of accounts receivable. Confirming accounts receivable is overcome when: (a) the auditor can perform other substantive audit procedures instead of accounts receivable confirmation procedures and (b) if the auditor determines those procedures provide equally persuasive audit evidence to what is expected to be obtained through confirmation.

  • States that the use of negative confirmation requests alone does not provide sufficient appropriate audit evidence. The use of negative confirmation requests – in combination with other substantive audit procedures – may provide sufficient and appropriate audit evidence.

  • Emphasizes the auditor’s responsibility to maintain control over the confirmation process and that the auditor is responsible for selecting the items to be confirmed, sending confirmation requests and receiving confirmation responses.

  • Identifies the need for alternative procedures to be performed when the auditor is unable to obtain audit evidence through confirmation.

  • Requires communication to the Audit Committee when the auditor did not perform confirmation procedures or otherwise obtain audit evidence by directly accessing information maintained by a knowledgeable external source for significant risks associated with cash or accounts receivable.


For an in-depth overview of this new standard’s adoption, please click here.

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For more information about the new accounts receivable confirmation, please contact your client audit team or any of the following: