PCAOB Seeks Comment On Audit Committee Proposal; SAG Meets Next Week

The Public Company Accounting Oversight Board has sprung into Spring with the release earlier this week of a Proposed Auditing Standard on Communication With Audit Committees (press release; Proposed Standard -rulemaking docket #30) on which the public comment period ends May 28. Auditors, financial executives, audit committee members, investors and others may wish to comment on the proposal.

Separately, the PCAOB's Standing Advisory Group is slated to meet next week. The one-and-a-half day SAG meeting, set to take place on April 7-8, will be webcast, and the agenda includes:

• Responsibilities of the Principal Auditor
• Auditor's Reporting Model. This discussion will include presentation by a panel of information relating to the history and evolution of the U.S. standard auditor's report and recommendations for changes to that report made by the U.S. Treasury Advisory Committee on the Auditing Profession (ACAP) in 2008. After the panelists' remarks, SAG members and observers will form break-out sessions to discuss potential ways to: (a) change the standard auditor's report and (b) clarify in the auditor's report the auditor's role in detecting fraud. On the second day of the meeting, PCAOB staff will present a summary of the break-out group discussions, and SAG members will have an opportunity to provide additional commentary.
• Update on Office of Chief Auditor Standard-Setting Activities and Emerging Issues
• Update on ACAP Recommendations
• Proposed Auditing Standard on Risk Assessment – Summary of Comments Received

My two cents (I remind you of the disclaimer on the right side of this blog): The SAG is one of my favorite advisory groups to listen to (e.g. webcasts), in large part because of the diversity of constituent groups represented by SAG members, and the high level of expertise of SAG members, particulary when individual SAG members speak openly and frankly on behalf of their constituents (auditors, investors, financial executives, audit committee members, etc.)In such an atmosphere, and with that group of participants, I believe SAG meetings can contain an exceptionally healthy dialogue, of value not only to the PCAOB, but also with respect to corollary accounting and regulatory issues being addressed by the SEC, FASB, AICPA and others, since auditing financial statements, issuing audited financial statements, or analyzing/understanding audited financial statements, does not take place in a vacuum.

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