PCAOB Members Say Standard-Setting Projects to be Completed
The new Public Company Accounting Oversight Board (“PCAOB”) members say it is probable that some of the projects on the previous board’s standard-setting agenda will be finished. At this week’s meeting with the Standing Advisory Group, PCAOB chairman William Duhnke said that board members are currently reviewing its agenda and working to ensure that existing projects will remain intact. Duhnke noted that before moving forward, however, the PCAOB needs to complete an evaluation of its standard-setting agenda and discuss which projects will receive priority.
Significant work has already been completed on three standard-setting projects. Last June, the PCAOB issued Release No. 2017-002, Proposed Auditing Standard—Auditing Accounting Estimates, Including Fair Value Measurements and Proposed Amendments to PCAOB Auditing Standards, and Release No. 2017-003, Proposed Amendments to Auditing Standards for Auditor’s Use of the Work of Specialists. The related proposals aim to improve the audit standards on accounting estimates and the use of specialists. In addition, Release No. 2016-002, Proposed Amendments Relating to the Supervision of Audits Involving Other Auditors and Proposed Auditing Standard — Dividing Responsibility for the Audit With Another Accounting Firm, was issued two years ago as an attempt to reinforce the requirements for a lead audit firm that oversees other accounting firms performing an audit. Following up on additional comments for that proposal, the PCAOB last September issued Release No. 2017-005, Supplemental Request For Comment: Proposed Amendments Relating to the Supervision of Audits Involving Other Auditors and Proposed Auditing Standard—Dividing Responsibility for the Audit With Another Accounting Firm.
In terms of how the PCAOB will evaluate standard-setting, board member James Kaiser said he is reviewing the agenda in three parts. The first part includes completing the standards that are near completion. Second, Kaiser wants the PCAOB to review the role technology plays in auditing today and in the future, as well as how the board should reflect that in the standards and guidance they provide. The third aspect involves assessing what the agenda should be later.