Wednesday, October 5, 2011

PCAOB Update

The Public Company Accounting Oversight Board has received over 140 comment letters; as of the September 30 comment deadline, on its Concept Release on the Auditor’s Reporting Model.

If the ideas in the Concept Release move forward to proposed and final rulemaking, they could mark significant changes in the language of the auditor’s report – and, in turn, in the way that audits are conducted.

(Although directed at public company audits, any resultant changes in PCAOB audit standards could also indirectly impact private company audits, to the extent audit firms that service both types of clients move to incorporate one set of standard practices in their audits (and to the extent there is harmony with AICPA requirements for audits of nonpublic companies).

In addition to the comment letter process, the PCAOB also invited feedback on the Concept Release at a September 15 roundtable; an unofficial transcript of the roundtable was recently posted.

FEI Views on Auditor’s Reporting Model
In a comment letter filed last week, FEI’s Committee on Corporate Reporting provided its views on the PCAOB’s Concept Release on the Auditor’s Reporting Model. Read more in the FEI CCR letter.

Next Up: Auditor Independence, Audit Firm Rotation
Another document on which the PCAOB seeks public comment is the Concept Release on Auditor Independence and Audit Firm Rotation. The comment period on that Concept Release closes December 14.

Staff Alert on Emerging Markets
In other PCAOB-related news, the audit regulator published a staff audit practice alert earlier this week, entitled: Staff Audit Practice Alert No. 8: Audit Risks in Certain Emerging Markets. See also the related press release.

McKenna, Weil Weigh In Re: PCAOB Board Vacancy
Writers Francine McKenna and Jonathan Weil recently weighed in on prospects for filing the current vacancy at the PCAOB Board. Read McKenna’s post in Forbes online, and Weil’s article in Bloomberg’s The Ticker. Hat tip to Broc Romanek of

UPDATE 10/6:
Office of Internal Oversight & Performance Assurance (IOPA) Issues Two ReportsOn October 5, the PCAOB posted on its website two reports that were recently issued by its office of Internal Oversight and Performance Assurance (IOPA), including the related transmittal letters accompanying the reports; the letters were sent by PCAOB Chairman Jim Doty to SEC Chairman Mary L. Schapiro. The two reports were on the PCAOB's:
IT Governance and Staffing, and
Controls Over Employee Internet Activity

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