PCAOB to seek comments on going concern

By Ken Tysiac

The PCAOB staff expects to solicit comments soon in its effort to revise the existing standard for public companies on the auditor’s evaluation of going concern.

A staff consultation paper seeking public comment is expected to be issued in the first quarter of 2015, according to an updated agenda posted Friday to the board’s website.

The standard is being reevaluated in the context of an accounting rule issued in August by FASB that defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and provide related footnote disclosures.

The PCAOB also is monitoring the activities of other standard setters and international regulators on the topic of going concern.

Other items on the PCAOB’s agenda in the first half of 2015 include:

  • A reproposal on the auditor’s reporting model. This would respond to feedback on the August 2013 release that proposed new communication of “critical audit matters” in the auditor’s report.
  • A supplemental request for comment on disclosure of the engagement partner. This proposed standard would require the naming of the engagement partner, and there has been disagreement over where the naming should take place if it is required.
  • Adoption of a new framework for the organization of PCAOB standards. The board is planning to reorganize public company auditing standards into a topical structure with a single, integrated numbering system.

Ken Tysiac is a JofA editorial director.

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