New AICPA audit standard requires confirming cash held by third parties

The AICPA Auditing Standards Board issued Statement on Auditing Standards No. 150, External Confirmations. Bryan Strickland at the Journal of Accountancy reported the release. The standard requires an auditor to perform external confirmation procedures for cash and cash equivalents held by third parties, subject to limited exceptions. That requirement is new.

The standard also recognizes that an auditor can satisfy the procedure by directly accessing information held by an external source, and it sets conditions for using negative confirmation requests. The AICPA tied the update to the spread of intermediaries in confirmation work. SAS No. 150 applies to audits of financial statements for periods ending on or after December 15, 2028. Early adoption is permitted.