Updated PCAOB Agenda Delays Standard-Setting Projects
The Public Company Accounting Oversight Board’s (“PCAOB”) efforts to finalize and propose new standards are on hold by one quarter, according to the audit regulator’s updated standard-setting agenda. Projects that will be delayed include expansion of the auditor’s report, which the PCAOB hopes to adopt a final rule in the first quarter of 2017. PCAOB Chairman James Doty originally wanted the project completed last year. Two other projects delayed are proposals regarding audits of accounting estimates and the use of specialists. Originally expected to be issued during the first quarter, both proposals are now set for a second quarter release.
2017 PCAOB Budget and Accounting Support Fee Approved
Last month, the Securities and Exchange Commission approved the Public Company Accounting Oversight Board’s (“PCAOB”) budget and accounting support fee for 2017. This year, the PCAOB’s budget will be $268.5 million and funded by an accounting support fee collection equaling $268 million. The budget is a four-percent increase from 2016 ($257.7 million). Additionally, 2017’s accounting support fee is a six-percent jump from the 2016 fee ($253.3 million).
Jay Hanson Resigns from PCAOB
RSM McGladrey’s Jay Hanson has resigned from the Public Company Accounting Oversight Board (“PCAOB”). Announced on December 23, 2016, Hanson’s resignation was unexpected and comes two years before his second term was supposed to end. Hanson gave no reason for, or indication of, stepping down, but his last public decision was being the sole objecting vote against the PCAOB’s budget for 2017. No explanation was given for Hanson’s resignation, and the PCAOB has not indicated when his replacement would be announced.
PCAOB Publishes Updated Standard-Setting Agenda
The Public Company Accounting Oversight Board (“PCAOB”) has released an updated version of its standard-setting agenda. Current as of June 30, 2016, the agenda outlines the PCAOB’s Office of the Chief Auditor’s standard-setting agenda, scheduled milestones, and major recent developments. The PCAOB’s plans under its updated agenda includes writing a proposal on The Auditor’s Use of the Work of Specialists, as well as conducting research and outreach on the project Quality Control Standards, Including Assignment and Documentation of Firm Supervisory Responsibilities. Click here to download a copy of the PCAOB’s updated standard-setting agenda.
PCAOB Amendments to Rule 4003 Receive SEC Approval
Amendments to Public Company Accounting Oversight Board (“PCAOB”) Rule 4003, Frequency of Inspections, have been approved by the Securities and Exchange Commission (“SEC”). Effective immediately, the amendments address how often the audit regulator performs inspections of various groups of registered public accounting firms. The amendments also: Remove the triennial inspection requirement for “substantial role only” firms, and replace it with a requirement to inspect at minimum five percent of such firms annually; Preserve the requirement to inspect firms that issue audit reports for an issuer but give the PCAOB permission to decline an inspection for any firm that does not. Read More.
PCAOB’s Franzel Discusses Audit Quality Improvements
At Baruch College’s 15th Annual Financial Reporting Conference earlier this month, Public Company Accounting Oversight Board (“PCAOB”) member Jeanette Franzel spoke on the Board’s evolution in audit oversight and work to safeguard investors and public interest. Specifically, Franzel’s speech focused on the improvements made to audit quality, and how PCAOB inspections and audit firms have contributed to those improvements. She also remarked that audit firms should continue strengthening their quality control systems and monitoring efforts, and advised the PCAOB to consider opportunities to advance its inspection program. A transcript of Franzel’s speech is available on the PCAOB website.