SEC Seeks Comments on PCAOB’s Auditor’s Report Standard
The Securities and Exchange Commission (“SEC”) wants feedback on the Public Company Accounting Oversight Board’s (“PCAOB”) auditing standard, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion. Recently, the SEC issued the related document for public comment, Notice of Filing of Proposed Rules on The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, and Departures from Unqualified Opinions and Other Reporting Circumstances, and Related Amendments to Auditing Standards.
Subject to SEC approval, the PCAOB standard is intended to improve the effectiveness of the auditor’s report by offering investors additional and relevant information. The standard and related changes require the auditor’s report to include a discussion regarding the critical audit matters. In addition, the auditor’s report must disclose the auditor’s tenure as the company auditor, and include the phrase “whether due to error or fraud” in the auditor’s responsibility description under PCAOB standards to prepare and conduct the audit to gain assurance on whether the financial statements are free of material errors.
Comments on the notice are due 21 days after its publication in the Federal Register.