Compliance Briefing — March 10, 2025

Executive briefing: PCAOB Auditing Standard 2310, The Auditor’s Use of Confirmation, applies to audits of financial statements for fiscal years ending on or after June 15, 2025. Firms must update confirmation procedures for cash, receivables, debt, and other balances to address heightened fraud risk, technology-enabled responses, and management interference safeguards.

Key compliance checkpoints

Risk-based design. AS 2310 requires auditors to evaluate whether confirmation is necessary based on risk assessment results, presumptively confirming cash and receivables unless justified otherwise.
Technology controls. Firms must assess the reliability of electronic confirmation platforms, including authentication, access, and change management controls.
Nonresponses and exceptions. Enhanced procedures demand alternative procedures, expanded follow-up, and root cause analysis when responses are incomplete or inconsistent.

Control alignment

Methodology updates. Refresh audit programmes, templates, and training materials to align with AS 2310 terminology, documentation, and required considerations.
Quality management. Integrate confirmation enhancements into QC 1000 implementation plans, including monitoring of electronic confirmation service providers.
Client readiness. Communicate expectations to issuers so they prepare contact lists, authorisations, and segregation of duties supporting timely confirmations.

Enablement moves

Run pilot audits using updated confirmation tools and scripts to validate workflow changes before FY2025 busy season.
Establish dashboards tracking confirmation response rates, exceptions, and turnaround time to evidence enhanced oversight.
Coordinate with IT audit teams to test API integrations, encryption, and logging for third-party confirmation platforms.

Sources

Zeph Tech supports audit firms as they embed AS 2310 into methodologies, technology platforms, and client engagement planning ahead of the June 2025 effective date.