Accounting Today reports that the AICPA has approved an updated auditing standard intended to modernize how auditors obtain evidence through external confirmation procedures, reflecting the growing use of digital systems and third-party intermediaries in the audit process. 

The new Statement on Auditing Standards: External Confirmations introduces a requirement for auditors to use external confirmation procedures for cash and cash equivalents held by third parties unless specific conditions apply. The revisions also update the standard to address the increasingly common use of intermediaries in the confirmation process and establish new conditions for the use of negative confirmations. 

One notable addition allows auditors to directly access information maintained by a knowledgeable external source as a way of satisfying certain external confirmation requirements. The changes are intended to align auditing standards more closely with how financial information is exchanged and verified in practice. 

"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,” AICPA Chief Auditor Jen Burns said in a statement. 

The updated standard is expected to be available in July and will take effect Dec. 15, 2028, although early adoption will be permitted. The revisions follow a similar update approved by the SEC in 2023 to the PCAOB’s audit confirmation standard for public company audits.