SEC Approves PCAOB Amendments to Audit Standards
"One of the Board's top strategic goals is to modernize our standards and rules to ensure they are best fit to protect investors from today's risks. Our markets are evolving every day. To keep investors protected in an era of rapid change, our standards and rules must keep up."
Erica Y. Williams, PCAOB Chair
"One of the Board's top strategic goals is to modernize our standards and rules to ensure they are best fit to protect investors from today's risks. Our markets are evolving every day. To keep investors protected in an era of rapid change, our standards and rules must keep up."
Erica Y. Williams, PCAOB Chair
The SEC approved Public Company Accounting Oversight Board ("PCAOB") proposals on (i) general auditor standards, (ii) the use of technology assisted analysis in audit procedures, and (iii) the standard to be used for assessing contributory liability of associated persons.
The SEC approved:
- new standard AS 1000 ("General Responsibilities of the Auditor in Conducting an Audit,") which consolidates, rescinds or revises previous standards, and creates a risk-based approach that mandates quality objectives and key processes for all firms' Quality Control ("QC") systems. (See previous coverage.)
- amendments to AS 1105 and AS 2301 ("The Auditor's Responses to the Risks of Material Misstatements"; "The Auditor's Response to the Risks of Material Misstatement") which address how auditors may use technology-based tools in performing and issuing an auditor report. (See previous coverage.)
- amendments to Rule 3502, ("Responsibility Not to Knowingly or Recklessly Contribute to Violations"), which revises the standard from recklessness to negligence for an associated person's contributory liability. (See previous coverage.)