PCAOB shares inspection priorities for 2025

The PCAOB shared its priorities for 2025 inspections of public company audits in a staff report published Monday.

“We encourage audit firms and audit committees to read this report, which provides timely perspectives to drive improvements in audit quality,” PCAOB Chair Erica Williams said in a news release.

According to the report, PCAOB inspectors will prioritize reviews in the financial, real estate, and information technology sectors in 2025.

Focus areas for inspectors include:

• Public companies affected by supply chain challenges;

• Public companies engaging in merger-and-acquisition activities or business combinations; and

• Broker-dealers who file compliance reports, and other broker-dealers who provide customers with various investment opportunities, such as introducing brokers.

The report includes other inspection considerations for 2025 and features suggested questions for audit committees designed to foster two-way communication on topics key to the audit process.

SEC commissioner comments on PCAOB’s future

The PCAOB is overseen by the SEC, and both organizations could look different following a changing of the guard in the White House.

SEC Commissioner Mark Uyeda, speaking Monday at the AICPA & CIMA Conference on Current SEC and PCAOB Developments, said he thought “all options should be on the table” related to the future of the PCAOB, which was established in 2002 to oversee the audits of public companies and of broker-dealers registered with the SEC.

“The PCAOB has now been around for a little more than 20 years. I think it’s very important we do a retrospective review — has it achieved the goals that were sought in the Sarbanes-Oxley Act?” Uyeda said.

Uyeda said he believes audit quality has strengthened since the formation of the PCAOB but added that a “deep dive” into what’s working and what’s not could be valuable.

He said possible considerations include folding the PCAOB into the SEC (which would require congressional action) or returning some of the PCAOB’s enforcement functions to the SEC.

Other PCAOB news

• A new PCAOB Spotlight report offers an in-depth review of culture at audit firms, based on more than 150 interviews with partners at the largest U.S. audit firms.
• The board’s recently launched staff series focused on audits of smaller companies continues with the publicaton of Audit Focus: Audit Committee Communications.
• The PCAOB has posted a staff presentation video designed to help auditors prepare for the implementation of AS 2310, The Auditor’s Use of Confirmation.

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.