In a large bowl, combine pudding mix and confectioners' sugar. Whisk in milk until mixture is smooth, then gradually fold in whipped topping.
Place a layer of graham crackers in the bottom of a 9x13 inch pan. Spread 1/3 of pudding mixture over crackers. Cover pudding with another layer of graham crackers. Continue layering until pudding mixture is gone. Cover last pudding layer with another layer of graham crackers.
Remove lid and seal from frosting and microwave at 20 second intervals, stirring between intervals, until frosting is pourable (about 1 minute). Spread frosting evenly over top layer of graham crackers. Refrigerate 24 hours before serving.