"The audit confirmation continues to be an important tool in conducting an effective and quality audit," said PCAOB Chairman Mark W. Olson (pictured) in a statement. "It is important today to update the standard on confirmations, given the significant advances in technology and methods of communication. This concept release will provide additional transparency to the public and allow for early input regarding the board's direction in considering a new standard."

The members of the board felt the standard needed updating in the light of the wave of auditing scandals in recent years, such as the Madoff, Satyam and Parmalat cases.

"Virtually everyone agrees that the current auditing standard on confirmations should be modernized. It was written in the early 1990s, before technology gave us today's sophistication in security and encryption of e-mail and online transactions," said PCAOB member Steven B. Harris. "The standard should address the use and reliability of confirmations received electronically. It should address the authenticity and accuracy of direct access to online account information. The use of such procedures could improve the effectiveness and efficiency of the auditing process."

Other concerns about the current standard, he noted, are that it does not consider how auditors should respond to the disclaimers and restrictive language inserted by a confirming party - the use of which is increasing. The standard also does not address an appropriate auditor response when management asks the auditor not to confirm certain accounts.

The PCAOB is seeking comment on the concept release for a 45-day period. For more information, visit www.pcaobus.org.