The AICPA is seeking comments by Aug. 31 on proposed Statement on Auditing Standards, External Confirmations. The proposed SAS would supersede SAS no. 67, The Confirmation Process (AICPA, Professional Standards, vol. 1, AU sec. 330). It represents the redrafting of SAS no. 67 to apply the Auditing Standards Board’s clarity drafting conventions and to converge with International Standards on Auditing (ISAs).
The proposed SAS, available at tinyurl.com/pszgen, is not expected to change practice significantly, but the ASB believes the most significant changes to existing standards are as follows:
- The addition of application material to the proposed SAS regarding the use of oral responses to confirmation requests as audit evidence.
- The definition of confirmation has been changed, as discussed in the “Issues for Consideration” section.
- Paragraphs 8 and 9 of the proposed SAS address the responsibilities of the auditor when management refuses to allow the auditor to send a confirmation request. These responsibilities include communicating with those charged with governance if the auditor concludes that management’s refusal is unreasonable, or the auditor is unable to obtain relevant and reliable audit evidence from alternative audit procedures. These procedures are not currently required by AU section 330.