PCAOB Standard-Setting Update as of December 31, 2017
The following reflects the Public Company Accounting Oversight Board’s (“PCAOB”) updated standard-setting agenda as of December 31, 2017: Auditing Accounting Estimates, Including Fair Value Measurements: Considering a recommendation for the next PCAOB action. The Auditor’s Use of the Work of Specialists: Considering a recommendation for the next PCAOB action. Supervision of Audits Involving Other Auditors: Reviewing comments on the supplemental request for comments and planning the next steps. Going concern: Covering outreach, monitoring, and research efforts. Along with the release of its revised standard-setting agenda, the PCAOB has added four projects to its research agenda. The projects involve quality control standards, changes in the use of data and technology in audits, the auditor’s role. Read More.
SEC Appoints New Members to PCAOB
The Public Company Accounting Oversight Board (“PCAOB”) will soon receive five new members. Announced by the Securities and Exchange Commission (“SEC”) on December 12, the new members are as follows: Robert Brown: A law professor at the University of Denver, Brown previously served on the PCAOB’s Standing Advisory Group and the SEC’s Investor Advisory Committee. William Duhnke: The staff director and general counsel to the Senate Committee on Rules and Administration, Duhnke was a Republican staffer in the Senate Banking Committee. Kathleen Hamm: The Global Leader in Securities and Fintech Solutions at Promontory Financial Group, Hamm has prior experience with. Read More.
Staff Guidance Published for Implementing Auditor’s Report Changes
New staff guidance by the Public Company Accounting Oversight Board (“PCAOB”) details updates to the auditor’s report that will be effective for audits during fiscal years ending on or after December 15, 2017. Released on December 4, the staff guidance covers critical changes to the auditor’s report, including the disclosure of auditor tenure and a statement on auditor independence. Also covered under the guidance are requirements concerning Critical Audit Matters (“CAMs”). Auditors can communicate CAMs voluntarily, but auditor communication will be required for audits of large accelerated filers for fiscal years ending on or after June 30, 2019. For all other inspections, the requirement is effective for. Read More.
PCAOB Staff Inspection Brief Reveals Audit Problems Continue
Public Company Accounting Oversight Board (“PCAOB”) inspectors continue to find the same issues during accounting firm inspections that were discovered in previous years. In its 18-page Staff Inspection Brief: Preview of Observations from 2016 Inspections of Auditors of Issuers, the PCAOB identified the following recurring audit deficiencies last year: Auditors’ assessments and responses to the risk of material misstatements Audits of internal controls over financial reporting (“ICFR”) Audits of accounting estimates such as fair value measurements Of the three audit deficiencies identified, the audits of internal controls were the most cited problem among accounting firms. The more common ICFR deficiencies. Read More.
SEC Approves Updates to Auditor’s Report
The Securities and Exchange Commission (“SEC”) has unanimously approved an audit reporting standard by the Public Company Accounting Oversight Board requiring significant improvements to certain public company reports. Such improvements aim to make the auditor’s report more informative and address the communication of critical audit matters (“CAMs”) and disclosures concerning auditor tenure. The new auditor’s report is expected to offer investors meaningful insight regarding audits, such as important estimates and judgments, substantial unusual transactions, and other potential risk areas for an organization. Speaking on the objective of the auditing standard, SEC Chairman Jay Clayton said investors will benefit from a. Read More.
PCAOB Issues Guidance for Revenue Recognition Standard
After reviewing implementation of Accounting Standards Update (“ASU”) No. 2014-09, Revenue From Contracts With Customers (Topic 606), the Public Company Accounting Oversight Board (“PCAOB”) is responding with a new Staff Audit Practice Alert (“APA”) to provide auditors with interpretive guidance. Released on October 5, APA No. 15, Matters Related to Auditing Revenue From Contracts With Customers, features 20 pages of staff guidance highlighting the PCAOB’s requirements and related considerations for audits. Such considerations include confirmation of management’s transition disclosures in financial statement notes and transition adjustments. The PCAOB said that as implementation of the Financial Accounting Standards Board’s revenue standard. Read More.
Topics: Accounting Standards Update "ASU", FASB, Financial Accounting Standards Board "FASB", PCAOB, Public Company Accounting Oversight Board "PCAOB", Revenue from Contracts with Customers (Topic 606), Revenue Recognition, Staff Audit Practice Alert