AccountingLink

    PCAOB

    Summary
    The Public Company Accounting Oversight Board (PCAOB) is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and the public interest by promoting informative, accurate, and independent audit reports.

    Proposed rules
    EY comment letters
    Selected PCAOB speeches
    Selected news releases

    Proposed rules

    11 May 2016

    The auditor's report on an audit of financial statements when the auditor expresses an unqualified opinion
    The PCAOB issued a revised proposal that would require auditors to include significantly more information in the auditor’s report. Auditors would be required to discuss critical audit matters (CAMs), which would be defined as items communicated to or required to be communicated to the audit committee that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective or complex auditor judgment. The revised proposal would also require disclosure of auditor tenure, among other things. The communication of CAMs would not be required for audits of brokers and dealers reporting under the Securities Exchange Act of 1934 Rule 17a-5, investment companies other than business development companies and employee benefit plans. Comments are due by 15 August 2016.

    12 April 2016

    Proposed amendments relating to the supervision of audits involving other auditors and proposed auditing standard - dividing responsibility for the audit with another accounting firm
    The PCAOB issued a proposal to strengthen existing requirements and impose a more uniform approach to a lead auditor's supervision of other auditors. The proposal spells out a lead auditor's responsibilities for planning, supervising, and evaluating the work of other auditors. The proposal is intended to increase the lead auditor's supervision of the work of other auditors and to enhance the lead auditor's ability to prevent or detect deficiencies in the other auditors' work. Comments are due by 29 July 2016.

    EY comment letters

    15 November 2017

    Comment Letter - PCAOB supplemental request for comment on proposal on audits involving other auditors
    In our comment letter, we continued to support the PCAOB’s efforts to strengthen the requirements for the lead auditor in an audit involving other auditors. However, we recommended ways to make the proposal more practical, particularly the proposed requirements related to compliance with independence and ethics requirements and the qualifications of other auditors.

    30 August 2017

    Comment Letter - PCAOB proposal on auditing estimates
    In our comment letter, we supported the PCAOB’s proposal to strengthen the requirements for auditing accounting estimates, including fair value measurements. However, we believe certain aspects of the proposal could be improved or made more practical, particularly the proposed requirements relating to the use of pricing information from third parties and the valuation of investments based on an investee’s financial condition or operating results.

    30 August 2017

    Comment Letter - PCAOB proposal on using the work of specialists
    In our comment letter, we supported the PCAOB’s proposal to strengthen the requirements for using the work of specialists. We asked the PCAOB to clarify some of the proposed requirements for using the work of a company specialist that we believe could be interpreted as requiring auditors to do significantly more work than they currently do. In addition, we expressed concerns regarding the proposal to rescind Auditing Interpretation 11, Using the Work of a Specialist: Auditing Interpretations of AS 1210, which we believe provides important prescriptive guidance and examples to help auditors assess the level of assurance obtained from legal opinions.

    29 July 2016

    Comment Letter - PCAOB proposal on audits involving other auditors
    In our comment letter, we supported the PCAOB’s efforts to strengthen the requirements for the lead auditor in an audit involving other auditors. However, we suggested that the lead auditor determination needs further study. We also offered some suggestions to make the amendments more scalable based on assessed risk and to allow lead auditors to rely on their firm’s system of quality controls when evaluating other auditors that are in their network.

    Selected PCAOB speeches

    5 May 2016

    PCAOB Board member Jeanette M. Franzel makes speech at the Baruch College, Robert Zicklin Center for Corporate Integrity 15th Annual Financial Reporting Conference
    PCAOB Board member, Ms. Franzel delivered a speech at the Baruch College, Robert Zicklin Center for Corporate Integrity 15th Annual Financial Reporting Conference entitled, "Progress and Evolution in Audit Oversight to Protect Investors and the Public Interest."

    18 April 2016

    Remarks by PCAOB Board Member, Steve Harris, at the 2016 PCAOB/AAA annual meeting
    PCAOB Board member, Steve Harris gave remarks at the 2016 PCAOB/AAA annual meeting entitled, "Issues for the academic community to consider."

    15 January 2016

    Remarks by PCAOB Board Member, Jeanette M. Franzel, at the American Accounting Association's 2016 auditing section mid-year meeting
    PCAOB Board member, Ms. Franzel gave remarks as part of a panel session entitled, "Opportunities for Researchers to Inform the PCAOB," at the American Accounting Association's 2016 auditing section mid-year meeting entitled, "The PCAOB’s Interests in and Use of Auditing Research."

    9 December 2015

    Chairman James R. Doty address at the AICPA Conference on Current SEC and PCAOB Developments
    Chairman James R. Doty spoke about protecting the investing public’s interest in informative, accurate, and independent audit reports.

    2 December 2015

    Steven Harris , PCAOB board member, speech at the 2015 international institute on audit regulation
    PCAOB Board member, Steven Harris, delivered a speech on 2 December at the 2015 international institute on audit regulation entitled, "Audit quality, firm independence, and the firm business model."

    Selected news releases

    21 September 2017

    PCAOB to hold open meeting to consider supplemental request for comment on new requirements for an auditor’s use of other auditors
    The Public Company Accounting Oversight Board will hold an Open Meeting on Tuesday, 26 September at 9 a.m., to consider issuing a supplemental request for comment on certain revisions to new requirements proposed last year that would apply to audits that involve auditors outside the firm issuing the audit report.

    30 August 2017

    PCAOB publishes staff inspection brief providing information about 2017 inspections of auditors of public companies
    The PCAOB published a staff inspection brief providing information about its ongoing 2017 inspections of auditors of public companies and other issuers. The brief is intended to help investors, auditors, and others understand the areas of significant audit risks targeted by PCAOB inspectors, and encourage auditors to work to improve audit quality.

    18 August 2017

    PCAOB annual report on 2016 inspections of broker-dealer auditors shows continued high level of audit deficiencies
    The PCAOB issued a report on its inspections in 2016 of auditors of brokers and dealers that shows a continued high level of audit deficiencies. PCAOB inspectors observed deficiencies at 97 percent of the firms inspected in 2016, compared to 96 percent in 2015.

    6 July 2017

    PCAOB posts standard-setting update
    The PCAOB posted to its website a standard-setting update on the current standard-setting projects and the research agenda.

    24 May 2017

    PCAOB to hold open meeting 1 June to consider adopting standard on the auditor’s report, and proposing updated requirements for auditing accounting estimates and an auditor’s use of the work of specialists
    The PCAOB announced that it will hold an Open Meeting on Thursday, 1 June at 2:30 p.m., to consider adopting a standard that would provide additional information in the auditor's report. The Board also will consider proposing amendments to standards that would strengthen and enhance requirements for auditing accounting estimates, including fair value measurements, and using the work of specialists in an audit.

    28 March 2017

    PCAOB posts updated data on characteristics of emerging growth companies
    The PCAOB posted to its website the most recent report on the characteristics of emerging growth companies prepared by its Office of Research and Analysis.

    18 August 2016

    PCAOB issues annual report on inspections of broker-dealer auditors
    The PCAOB issued an annual report on its interim inspection program for auditors of brokers and dealers. The annual report describes results of inspections conducted in 2015, the first inspection year in which all inspected engagements were governed by the SEC’s 2013 amendments to Exchange Act Rule 17a-5, including the new requirement that broker-dealer audits be performed in accordance with PCAOB standards. The report shows high levels of deficiencies similar to inspection results in previous years.

    14 July 2016

    Staff Inspection Brief: Information about 2016 Inspections
    The PCAOB issued a staff inspection brief detailing the scope, focus, and objectives of its ongoing 2016 inspections of auditors of public companies and other issuers. The information in this brief may help audit firms, investors, and others better understand the risk-based factors that the PCAOB considers when inspecting audits.

    14 July 2016

    Staff Inspection Brief: Information about 2016 Inspections of Auditors of Brokers and Dealers
    The PCAOB issued a staff inspection brief detailing the scope, focus, and objectives of its ongoing 2016 inspections of auditors of brokers and dealers. These 2016 inspections are focusing on audit areas and attestation procedures where inspectors previously found deficiencies, as well as auditor independence and engagement quality review.

    28 June 2016

    PCAOB Issues staff guidance for firms filing the new Form AP, Disclosing engagement partner names and other firms participating in public company audits
    The PCAOB issued staff guidance, a sample Form AP, Form AP instructions and technical filing guidance to help audit firms implement the new rules on audit transparency that require them to name the engagement partner and include information about other accounting firms that participated in the audit in a new Form AP.

    10 May 2016

    PCAOB rules to improve transparency by disclosing engagement partner name and information about other audit firms are approved by SEC
    The PCAOB announced that its rules to improve the transparency of the audit by disclosing the names of audit engagement partners, as well as information about other firms that participate in the audits, were approved by the SEC. The PCAOB expects to release shortly staff guidance and other tools for firms to use in implementing the new rules.

    6 May 2016

    PCAOB SAG meeting on May 18-19 to focus on non-GAAP measures, the auditor's reporting model, and supervision of other auditors
    The PCAOB published the agenda for its upcoming Standing Advisory Group meeting featuring discussions on the auditor's role regarding non-GAAP and other company performance measures, the auditor's reporting model, and how lead auditors supervise other auditors. The meeting will be held 18-19 May 2016, in Washington.

    6 May 2016

    PCAOB to hold open meeting May 11 to consider reproposing standard on the auditor’s reporting model
    The PCAOB announced an Open Meeting on Wednesday, 11 May at 10 a.m., to consider a reproposal that would provide additional information in the auditor's report. As with the original proposal, the reproposal under consideration May 11 is expected to retain the pass/fail model of the existing auditor's report while making the report more relevant and informative to investors and other financial statement users.

    21 April 2016

    PCAOB publishes staff audit practice alert on improper alteration of audit documents
    Staff of the PCAOB published a Staff Audit Practice Alert reflecting PCAOB staff concerns about auditors improperly altering audit documentation in connection with a PCAOB inspection or investigation.

    19 April 2016

    PCAOB releases staff inspection brief previewing 2015 inspection findings
    The staff of the PCAOB published an inspection brief that previews the results of 2015 inspections. Preliminary inspection results of annually inspected firms indicate the overall number of audit deficiencies identified in 2015 decreased compared to the results from 2014.

    7 April 2016

    PCAOB to hold open meeting to consider proposing new requirements for an auditor's use of other auditors
    The PCAOB announced an Open Meeting for Tuesday, 12 April, at 10 a.m., to consider proposing new requirements that would apply to audits that involve accounting firms or accountants outside the firm issuing the audit report.

    6 April 2016

    PCAOB requests comment on engagement quality review standard under new post-implementation review program
    The PCAOB released a request for public comment from the PCAOB Center for Economic Analysis that will inform the first post-implementation review of the overall effect of previously adopted PCAOB rules and standards. The goal of the program is to evaluate whether adopted rules and standards are accomplishing their intended purposes, and identify any unintended consequences, as well as gauge the overall effects of the rules or standards.

    5 April 2016

    PCAOB issues report describing inspection observations related to audit firms' communications with audit committees
    The PCAOB released a report on inspection observations of registered audit firms' initial implementation of and compliance with the PCAOB auditing standard on Communications with Audit Committees, describing that in 93 percent of the audits inspected in 2014 for which the standard applied, no failures to comply with the requirements were identified. Preliminary results from 2015 inspections show similar results.

    15 March 2016

    PCAOB announces 2016 forums for auditors of broker-dealers
    The PCAOB announced the dates for five 2016 Forums for Auditors of Broker-Dealers, and the agenda for the first meeting, which will be held in Orange County, California on Wednesday, 20 April.

    15 March 2016

    PCAOB announces 2016 forums on auditing in the small business environment
    The PCOAB announced the dates for seven 2016 Forums on Auditing in the Small Business Environment and the agenda for this year's first forum, which will be held in Orange County, California on Thursday, 21 April.

    23 December 2015

    PCAOB announces webinar on inspections of auditors of brokers and dealers
    The PCAOB announced the date of its first 2016 webinar in which PCAOB staff will provide an update on findings and developments in the PCAOB interim inspection program for auditors of brokers and dealers. Continuing an outreach initiative that began this year, the webinar will discuss recent inspection findings released in Board public reports and will also cover the inspection process under the interim inspection program. It will take place on Monday, 11 January 2016, from 2 p.m. to 4 p.m. EST.

    10 December 2015

    PCAOB schedules open meeting to consider requiring naming the engagement partner and other accounting firms participating in an audit
    The PCAOB has scheduled an open meeting for 10 a.m. on Tuesday, 15 December to consider adopting new rules and amendments to auditing standards to require audit firms to name the engagement partner and other accounting firms that participated in an audit. The rules under consideration would require disclosure of the name of the audit engagement partner on Form AP. Firms would also be required to use Form AP to disclose information about other accounting firms participating in an audit, including the names of the firms and the extent of their participation.

    24 November 2015

    PCAOB approves 2016 budget and 2015-2019 strategic plan
    The PCAOB approved approved its 2016 fiscal-year budget of approximately $257.7 million and its 2015-2019 strategic plan. The 2016 budget is $6.8 million, or 2.7 percent, more than the Board's 2015 budget of $250.9 million. The strategic plan serves as the foundation for the budget and guides the PCAOB's programs and operations.

    30 June 2015

    PCAOB updated 2015 standard-setting agenda
    The PCAOB posted an updated Standard-Setting Agenda that outlines milestones on various standard-setting projects.

    23 June 2015

    PCAOB solicits nominations for Standing Advisory Group
    The PCAOB is soliciting nominations for the 2016-2018 term for its Standing Advisory Group, which advises the PCAOB on its standard-setting agenda and related activities. The deadline for submissions is 21 August 21 2015.

    25 November 2013

    PCAOB approves 2013 budget and 2012-2016 Strategic Plan
    The PCAOB approved its 2014 fiscal-year budget of approximately $258.4 million and its 2013-2017 strategic plan. The budget is $12.8 million, or 5 percent, above the Board's 2013 budget of $245.6 million.

    30 June 2013

    PCAOB posts standard-setting agenda
    The PCAOB posted its standard-setting agenda to its website. The agenda is determined based on Board priorities, results of the PCAOB's oversight of registered public accounting firms, monitoring of the environment, consultation with the Board's Standing Advisory Group ("SAG"), input from the Board's Investor Advisory Group ("IAG"), and discussion with the SEC, among other factors.

    18 October 2012

    PCAOB Board member opening statements on the public meeting on auditor independence and audit firm rotation
    The PCAOB published to its website Board member opening statements on the Public Meeting on Auditor Independence and Audit Firm Rotation.

    18 October 2012

    PCAOB posts panelist statements from public meeting
    The PCAOB posted to its website written statements from a variety of panelists who are scheduled to address the Board’s Public Meeting on Auditor Independence and Audit firm Rotation.

    17 September 2012

    PCAOB to host third public meeting on auditor independence and audit firm rotation on 18 October in Houston
    The PCAOB will host its third public meeting on ways to enhance auditor independence, objectivity, and professional skepticism, including through mandatory rotation, or term limits, for audit firms. The meeting, being held on 18 October in Houston, will consist of panel discussions, during which panelists will be invited to present their views on the matters raised in the PCAOB concept release and board members will have the opportunity to ask panelists follow-up questions.