The PCAOB took the first step toward what’s intended to be a comprehensive reorganization of its auditing standards.

Board members unanimously voted to publish a proposal for a framework that would place the PCAOB’s auditing standards into a topical structure with a single, integrated numbering system. May 28 was the comment deadline for the proposal, which is available at

PCAOB Chief Auditor Martin Baumann told the board that the current structure does not present an orderly classification of the board’s standards. The “AS” standards that have been developed by the board since its inception 10 years ago—as well as the interim “AU” standards that were adopted by the board and have not been superseded—would be placed together in a four-digit numbering system designed to follow the flow of an audit.

Neither the proposed framework nor amendments that would be necessary for implementation would add new requirements for performing or reporting on audits.

PCAOB Chairman James Doty said that the board’s current standards, when printed, exceed 2,000 pages. He said navigating those standards can prove daunting.

Implementation costs are expected to be limited to updating methodology and reference materials, and board member Lewis Ferguson said the temporary inconvenience should be overcome by long-term efficiencies in navigating the standards.

Doty said, “This release represents, in my mind, an important first step in making the PCAOB standards more available to auditors.”

The proposed new numbering system would group the standards under the following categories:

  • General auditing standards.
  • Audit procedures.
  • Auditor reporting.
  • Matters related to filings under federal securities laws.
  • Other matters associated with audits.

PCAOB Deputy Chief Auditor Keith Wilson said auditing interpretations would remain part of the standards as a result of the proposal. But rather than being interwoven in the standards, the interpretations would be presented in a different place, separate from the standards themselves. A link would be provided from each standard to its related interpretations.

Wilson said the proposed reorganization would present a comprehensive view of how the standards are intended to work together. This would allow auditors looking at a new standard to see how it is intended to be applied in conjunction with the existing standards.

  Auditors looking for guidance on the new clarified auditing standards about audits of group financial statements and the auditor’s report can turn to a new resource.

The new standard, AU-C Section 600, Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors), took effect for audits of group financial statements beginning for calendar year 2012/fiscal year 2013 audits as part of the AICPA Auditing Standards Board’s clarity project.

Nonauthoritative guidance regarding the implementation of AU-C Section 600 is available in 41 Technical Questions and Answers (TPAs) included in new TIS Section 8800, Audits of Group Financial Statements and Work of Others.

The TPAs are based on the questions and answers included in the Audit Risk Alert Understanding the Responsibilities of Auditors for Audits of Group Financial Statements—2012, as well as implementation issues that have arisen, particularly with regard to equity investments, and variable-interest entities and the component’s use of a basis of accounting that differs from that of the group.

Meanwhile, TPA 9100.07 has been issued to provide nonauthoritative guidance stating that auditors can comply with a requirement in AU-C Section 700, Forming an Opinion and Reporting on Financial Statements, by naming the city and state where the auditor practices, in the firm’s letterhead on which the auditor’s report is issued.

AU-C Section 700 requires the auditor’s report to name the city and state where the auditor practices. More information is available at

  Auditors of fair value for financial reporting are eligible for the AICPA Accredited in Business Valuation (ABV) credential as a result of a recent revision.

The AICPA Forensic & Valuation Services (FVS) Section recently changed the experience requirement section of the ABV credential application kit to make the credential available to those auditors.

To qualify, auditors must perform tasks consisting of:

  • Recalculation of discount rates.
  • Capitalization rates.
  • Verification of models on calculations of value using professional judgment.

More information on the ABV credential is available at Questions can be emailed to


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