PCAOB Wants to Improve Rules for Work of Specialists
Seeking to reinforce the applicable requirements for auditors that use the work of specialists in an audit, the Public Company Accounting Oversight Board (“PCAOB”) has issued the proposal, Proposed Amendments to Auditing Standards for Auditor’s Use of the Work of Specialists. The proposal aims to advance investor protection by improving the requirements for reviewing the work of company specialists, and applying a risk-based method to assessing the work of a specialist hired by the auditor. Specialists are often hired or appointed by companies to offer information used in preparing financial statements, and their work is frequently used as audit evidence.. Read More.
AICPA’s Auditing Standards Board Issues Comfort Letters Guidance
Impacting comfort letters issued on or after December 15th, the American Institute of Certified Public Accountants’ (“AICPA”) Auditing Standards Board (“the Board”) has released Statement on Auditing Standards (SAS) No. 129, Amendment to Statement on Auditing Standards No. 122 Section 920, “Letters for Underwriters and Certain Other Requesting Parties,” as amended (AICPA, Professional Standards, AU-C sec. 920). The guidance applies to auditors when they issue requested comfort letters associated with a non-issuer’s financial statements contained within registration statements. When the AUs were clarified, AU-C section 920 was not intended to alter practices connected to comfort letters. However, particular unintended issues managed. Read More.
PCAOB’s Related Parties Proposal Open for Comments
In response to the Public Company Accounting Oversight Board’s (“PCAOB”) adoption of Auditing Standard No. 18, Related Parties, the U.S. Securities and Exchange Commission (“SEC”) has released Public Company Accounting Oversight Board; Notice of Filing of Proposed Rules Relating to Auditing Standard No. 18, Related Parties, Amendments to Certain PCAOB Auditing Standards Regarding Significant Unusual Transactions, and Other Amendments to PCAOB Auditing Standards (AS 18), for public comment. Replacing the interim standard AU sec. 334, Related Parties, AS 18 requires certain audit procedures during the auditor’s evaluation process, such as identifying transactions and relationships between an organization and its related. Read More.
Revised Proposal to Focus on Auditor Reporting Changes
The Public Company Accounting Oversight Board’s (“PCAOB”; “the Board”) staff is working on a revised proposal that reflects changes to the auditor’s reporting model. Based on Release No. 2013-005, Proposed Auditing Standards on the Auditor’s Report and The Auditor’s Responsibilities Regarding Other Information and Related Amendments, the updated proposal will make available additional information on audit reports for investors. Despite investors praising the change, public organizations and accounting firms believe the new disclosure requirement will expose private company matters that should be kept confidential. In their opinion, management should be accountable for divulging such information, not auditors. Over the past few. Read More.
New PCAOB Standard & Amendments to Improve Auditing Process
Enhancing auditor performance requirements, the Public Company Accounting Oversight Board (“PCAOB”) has adopted a new standard and amendments reflecting three essential areas of the auditing process. Agreed upon at its recent meeting, the PCAOB concluded that current requirements in the related areas of the auditing process provide insufficient mandated procedures and are inadequately risk-based. Further, inspection and enforcement activities show these areas continue to be major weaknesses among auditors. As a result, the PCAOB has implemented Auditing Standard No. 18, Related Parties (“AS 18”). Taking the place of interim standard AU sec. 334, Related Parties, AS 18 reflects transactions and. Read More.
Supplemental Request for Comment Issued by PCAOB
Regarding its proposal over the restructuring of auditing standards, the Public Company Accounting Oversight Board (“PCAOB”; “the Board”) has issued a supplemental request for comment. The PCAOB’s request explains how the proposed amendments to the Boards’ standards are necessary to carry out the proposal, as well as includes slight changes to Proposed Framework for Reorganization of PCAOB Auditing Standards and Related Amendments to PCAOB Auditing Standards and Rules, which was issued last year. Per the March 2013 proposal, the framework would structure the existing interim and Board-issued auditing standards into categories. The standards would be classified as: General auditing standards;. Read More.