A New Audit Standard Lands in 2028. Here Is What It Means for You.

If your company goes through an annual audit, a change is coming that will shape how your auditor verifies some of your most important balances. In May 2026, the AICPA's Auditing Standards Board approved an update to the rules auditors follow when they confirm information with outside parties. It does not take effect until December 15, 2028, but the direction is clear, and a little context now will make the transition smoother. Here is what it is, in plain terms, and what it means for you.

First, what is an audit confirmation?

When auditors verify a number on your financial statements, they often do not take your records at face value. For certain balances, they go straight to the source. A confirmation is when your auditor contacts an outside party, like your bank, and asks them to verify the information directly. It is one of the most reliable forms of audit evidence, because it comes from someone other than the company being audited.

The new standard modernizes that process. It reflects how much has changed since the old rules were written, especially the rise of digital confirmation platforms and the third-party intermediaries that now sit between auditors and the institutions they contact.

What is changing

A few updates stand out for business owners:

• Cash held by third parties will be confirmed more consistently. The standard adds a requirement for auditors to confirm cash and cash equivalents held by third parties, unless specific conditions are met. If your company holds cash with outside institutions, expect that to be verified directly.
• Risk drives the work. Confirmation procedures are more clearly tied to where the real risk of misstatement sits, so auditors concentrate their effort where it matters most.
• Direct access is recognized. When an auditor can securely access information straight from a trusted external source, that can now count as valid confirmation evidence. This reflects how confirmations actually happen today.
• Tighter rules on lighter-touch confirmations. The standard adds new conditions for using negative confirmations, a method that asks a party to respond only if something is wrong. Its use will be more limited going forward.

Why it matters to you

On the surface, this is a technical change for auditors. But a more rigorous confirmation process produces a more reliable audit, and that benefits everyone who relies on your financial statements: lenders, investors, boards, and partners. A clean, well-supported audit is an asset when you are seeking financing, courting investment, or planning a transaction.

You may notice the process feels a bit more thorough, particularly around cash. That is by design. Confirming cash directly is one of the simplest and strongest defenses against both error and fraud.

The timeline

The standard applies to audits of financial statements for periods ending on or after December 15, 2028, with early adoption permitted. That gives you and your audit team time to prepare. If you are curious whether early adoption makes sense for your situation, it is a good question to raise with your auditor.

How we can help

At Brinker Simpson & Company, we stay ahead of changes like this so our clients are never caught flat-footed. If you have questions about how the new confirmation standard could affect your audit, or what you can do now to be ready, we are happy to talk it through.