PCAOB invites additional comments on audit firm rotation

BY KEN TYSIAC

The PCAOB is soliciting further public comment on its concept release on auditor independence and mandatory audit firm rotation in anticipation of a public meeting on the issue Thursday in San Francisco.

The comment period for the concept release was reopened Monday and will be extended through July 28. The release sought comment on how to enhance auditor independence, objectivity, and professional skepticism, and on mandatory audit firm rotation. Comments can be mailed to the PCAOB or emailed to comments@pcaobus.org.

The PCAOB has already received more than 650 comment letters on the concept release, which was originally issued on Aug. 16, 2011. The AICPA sent a letter that supported the PCAOB’s overall goal of enhancing auditor independence, objectivity, and professional skepticism, but it urged the PCAOB to refrain from pursuing mandatory firm rotation because it “carries significant costs and possible unintended consequences that have the potential to hinder audit quality.”

Panelists at the public meeting in San Francisco will include academics, investor advocates, audit committee chairmen, audit firm executives, and former regulators who are primarily based on the West Coast or in Asia. Former SEC Chairman Harold Williams and former SEC Chief Accountant Conrad Hewitt are among the former regulators on the panel. The meeting will be available via webcast at the PCAOB website.

The PCAOB held a similar meeting March 21–22 in Washington, where some panelists offered alternatives to audit firm rotation that could improve auditor independence and objectivity.

Ken Tysiac ( ktysiac@aicpa.org ) is a JofA senior editor.

SPONSORED REPORT

"We need to talk."

Start a conversation with your clients using these questions and checklist for post busy-season business development.

NEWS

Revenue recognition revisited

A reexamination of new revenue recognition rules has led to tinkering with the standard that is considered the biggest achievement of the convergence efforts of FASB and the International Accounting Standards Board.

INTERVIEW

Staying focused at the top

Olivia Kirtley, CPA, CGMA, an accomplished corporate director with almost 20 years of experience serving on boards, talks about strategic, risk, and compliance issues that keep board members up at night.