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n The PCAOB proposed for public comment a new auditing standard on engagement quality review and a conforming amendment to the board’s interim quality control requirements. The proposed standard would supersede the board’s interim quality control standard, SECPS Requirements of Membership § 1000.08(f).
Section 103 of the Sarbanes-Oxley Act of 2002 directs the board to include in its auditing standards a requirement that each registered public accounting firm “provide a concurring or second partner review and approval of [each] audit report (and other related information), and concurring approval in its issuance.”
The proposed standard, which would apply to all
engagements performed in accordance with PCAOB standards, is
risk-based and designed to increase the likelihood that engagement
deficiencies would be identified and corrected before the auditor
issues a report. Comments are due by May 12.
The proposed standard provides a firmer framework for an engagement quality reviewer to objectively evaluate the significant judgments made by the engagement team and the conclusions reached in forming the overall conclusion on the engagement and in preparing the engagement report. The proposed standard is available at www.pcaobus.org/Rules/Docket_025/2008-02-26_Release_No_2008-002.pdf .
Comments are due by May 12.
n The Center for Audit Quality released 2007 Year In Review , a report on the organization’s first year in operation. The report highlights activities including the Public Dialogue Tour series of events, during which the CAQ gathered ideas from investors and other market stakeholders on improving financial reporting. The CAQ will issue a report with specific recommendations when the tour ends this summer.
According to the report, the center is also working closely with two federal advisory panels: the Department of the Treasury's Advisory Committee on the Auditing Profession and the SEC's Advisory Committee on Improvements to Financial Reporting.
“In a short space of time, the CAQ and its public board members have brought the profession together and are actively engaged with market participants,” CAQ Governing Board Chair and Ernst & Young LLP Chairman and CEO James S. Turley says in the report. The 12-page document is available at http://thecaq.org/about/CAQ_Year_In_Review_2007.pdf.