PCAOB Proposal to Address Auditing Accounting Estimates
A new proposal by the Public Company Accounting Oversight Board (“PCAOB”) seeks to strengthen the applicable requirements for auditing accounting estimates. Issued as Proposed Auditing Standard for Auditing Accounting Estimates, Including Fair Value Measurements, the proposal advises auditors to use professional skepticism and give added attention to possible management bias while auditing accounting estimates. Auditors have had issues auditing some accounting estimates, causing PCAOB inspectors to flag deficiencies at both small and large audit firms. Such deficiencies have raised concerns on auditors’ application of professional skepticism and their consideration of possible management bias. In response, the PCAOB proposes a new. Read More.
Topics: and Investments in Securities (AS 2503), Auditing, Auditing Accounting Estimates (AS 2501), Auditing Derivative Instruments, Auditing Fair Value Measurements and Disclosures (AS 2502), Fair Value Measurements, Hedging Activities, PCAOB, Public Company Accounting Oversight Board "PCAOB"
Financial Restatements Lowest in 15 Years
Audit Analytics is reporting the lowest total number of financial restatements among publicly traded companies since 2002. In its May report, Audit Analytics said restatements dropped 6.83 percent last year (671 companies). Separately, the percentage of financial restatements in 2016 was the lowest since 2007. Regulatory oversight is receiving partial credit for the low numbers. Audit Analytics Director of Research Don Whalen was not surprised by the downward trend, saying that improved internal controls over financial reporting have helped companies. Whalen noted the improved internal controls are due largely to the Public Company Accounting Oversight Board’s efforts and the Committee. Read More.
PCAOB Considering Revenue Recognition Interpretive Guidance for Auditors
Auditors could receive interpretive guidance on the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard. Last month, Public Company Accounting Oversight Board (“PCAOB”) Chief Auditor Martin Baumann said a project is in the works to determine what type of guide the board should release concerning Accounting Standards Update (“ASU”) No. 2014-09, Revenue From Contracts With Customers (Topic 606). To help public companies implement ASU No. 2014-09, Baumann remarked that the PCAOB is considering releasing an Audit Practice Alert. The PCAOB staff has already reviewed Staff Audit Practice Alert (“APA”) No. 12, Matters Related to Auditing Revenue in an Audit of. Read More.
Topics: Accounting Standards Update "ASU", Audit Practice Alert, audits, FASB, FASB Accounting Standards Codification, 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
PCAOB Approves Expanded Auditor’s Report
In a unanimous decision, the Public Company Accounting Oversight Board (“PCAOB”) has approved a rule to expand auditor reports in a Securities and Exchange Commission (“SEC”) filing. Announced on June 1, the new format will make filed auditor reports more valuable to investors. The rule requires a public company’s external auditor to disclose any critical audit matters that arise while auditing their clients, and provide details on clients’ financial reporting procedures. Such requirements are listed under Release No. 2017-001, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion and Related Amendments to PCAOB. Read More.
Forums on Auditors of Broker-Dealers Coming This Fall
The Public Company Accounting Oversight Board (“PCAOB”) has released the schedule for its 2017 Forums for Auditors of Broker-Dealers. Only two forums are set for this year, which will be held at the following locations: Las Vegas, Nevada, on October 20, 2017 Jersey City, New Jersey, on December 7, 2017 This year’s forums include case studies and discussions on inspection observations and trends, enforcement issues, and auditor independence. Securities and Exchange Commission and the Financial Industry Regulatory Authority staff members will lead presentations on agenda topics. In addition, there will be an auditing standards update and a panel discussion about professional. Read More.
Topics: Financial Industry Regulatory Authority "FINRA", Forums for Auditors of Broker-Dealers, PCAOB, PCAOB Agenda, Public Company Accounting Oversight Board "PCAOB", Securities and Exchange Commission "SEC"
Standing Advisory Group Wants PCAOB to Pause on Standard-Setting for Technology Use
With the Public Company Accounting Oversight Board (“PCAOB”) studying auditors’ increased technology and data use, members of its Standing Advisory Group (“SAG”) have asked the board to proceed with caution when drafting new guidance. Referencing member feedback during a meeting last month, PCAOB Deputy Chief Auditor Patrick McNamee said that the SAG wants the board to focus on guidance instead of updating auditing standards. The ever-changing use of technology in audit work is being contributed to the SAG’s stance. SAG members advised the PCAOB to use its inspection findings to assess how accounting firms use technology and data in audits,. Read More.