NASAA Supports PCAOB Proposal to Increase Audit Reporting Requirements

The North American Securities Administrators Association ("NASAA") supported a PCAOB proposal to enhance the PCAOB's periodic reporting and special reporting framework. The proposed changes include expanded periodic reporting of financial, governance, and network information, as well as faster special reporting, particularly on cybersecurity events.

In its comment letter supporting the proposal, NASAA agreed with the PCAOB's assessment that "the proposed disclosure revisions would be a more effective means to allow investors, audit committees and other stakeholders to evaluate both registered firms and the public company audits they provide." NASAA also agreed the disclosure revisions would enable the PCAOB to "standardize the information received, and mitigate the submission of incomplete, inaccurate, or insufficiently detailed information."

In addition, NASAA agreed with PCAOB's timely information sharing requirements for "significant cybersecurity events within five business days and periodic reporting [of] the audit firm's policies and procedures" on cybersecurity risks. NASAA encouraged the PCAOB "to especially consider comments and feedback from audit market participants with regard to existing applicable regulations from other agencies to ensure the proposed reporting framework is appropriate."