The American Institute of Certified Public Accountants (AICPA) has revised an auditing standard intended to update the way practitioners obtain audit evidence from external sources.
The new ‘Statement on Auditing Standards: External Confirmations procedure’ was finalised by the AICPA’s key standard-setting body, the Auditing Standards Board.
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The AICPA said the new rule introduces a requirement for auditors to carry out external confirmation procedures for cash and cash equivalents held by third parties, except where certain specified conditions apply.
The standard also updates existing guidance to better address situations in which intermediaries are used in the confirmation process.
The updated standard also revises how negative confirmations can be used, setting out additional conditions that must be satisfied before auditors rely on this form of evidence.
Another change is new guidance on situations where auditors directly access information held by a knowledgeable external party.
The standard explains how such access can be used to meet the expectations for external confirmation procedures.
AICPA chief auditor Jen Burns said: “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.”
The new standard is due to take effect for companies on or after 15 December 2028, with early adoption permitted.
The AICPA is among the world’s largest member associations representing the certified public accountant profession, with around 397,000 members.
Earlier this month, the AICPA requested that the US Treasury Department and the Internal Revenue Service issue guidance on recent changes to a tax provision that affects tax‑exempt entities.
