Audit firms’ quality controls will be the subject of PCAOB discussion in 2014 that could lead to a new auditing standard, board Chief Auditor and Director of Professional Standards Martin Baumann said Tuesday. The PCAOB plans to issue a concept release seeking comment on ways to address audit firm quality
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Audit & assurance
Effects of nonaudit services at audit firms concern PCAOB, SEC
Regulators are asking whether the increasing provision of nonaudit and consulting services by audit firms poses risks to audit quality, and the PCAOB plans a formal examination of the issue in 2014. The PCAOB plans to hold round-table discussions on the issue next year with audit firm leaders and other
PCAOB seeks improvement in engagement quality reviews
A PCAOB report released Friday instructs audit firms to take steps to ensure that engagement quality reviews detect the audit deficiencies they are meant to identify. Although firms’ methodologies reviewed by the PCAOB were generally consistent with the requirements of Auditing Standard No. 7, Engagement Quality Review, the report says
PCAOB proposal could result in public tracking of auditors
At first, the names of audit engagement partners disclosed in public company audit reports might not mean much to investors, PCAOB Associate Chief Auditor Jessica Watts said Wednesday as she described a new board proposal. Initially, little public information about engagement partners would be available, Watts said, under a PCAOB
PCAOB proposal to name engagement partner may generate debate
A vigorous debate is expected as the PCAOB prepares to repropose a rule that would require engagement partners’ names to be disclosed in public company auditor’s reports. The PCAOB has announced that it will consider making a reproposal on Wednesday. The board will welcome public comment on the issue, and
Shooting straight
The new imperative for internal auditors is clear. Companies increasingly expect their internal audit function to take on a more strategic, collaborative role within the business. At first glance, that seems to be a complex notion. Independence and objectivity safeguards indicate that internal auditors should not be proposing or setting
PCAOB to consider requiring name of engagement partner in auditor’s report
The PCAOB will consider reproposing amendments to auditing standards that would require disclosure in the auditor’s report of the name of the engagement partner and certain other participants in the audit. This topic will be considered during a meeting at 9:30 a.m. EST on Dec. 4, and has been a
ARSC proposes framework for compilation and review engagements
A new proposal by the AICPA Accounting and Review Services Committee (ARSC) will provide a framework for performing and reporting on compilation and review engagements. The proposal, resulting from ARSC’s clarity project, also sets forth the meaning of certain terms used in Statements on Standards for Accounting and Review Services
Top risk for businesses: Regulation, compliance overload
Corporate directors believe regulatory and compliance overload is the greatest risk facing their business, well ahead of cyber threats and corruption, a new survey shows. Also, board members seem skeptical about some new proposals from the PCAOB regarding the auditor’s reporting model. That’s according to the latest BDO Board Survey,
More transparency sought from audit committees
A consortium of U.S. governance organizations is calling on public company audit committees to enhance reporting about their activities. Increasing transparency about the audit committee’s roles and responsibilities could increase investor confidence, according to the organizations’ new Enhancing the Audit Committee Report: A Call to Action. The Center for Audit
Five things the PCAOB considers in assessing firms’ remediation
The PCAOB on Monday posted to its website the criteria its inspectors consider when evaluating an audit firm’s efforts to address inspection report findings. If remediation efforts fail to satisfy the board within 12 months, the report that contains the criticism may be made public. While assessing firms’ remediation efforts,
Significant changes to compilation included in 3 proposed standards
From Staff Reports Three standards proposed by the AICPA Accounting and Review Services Committee (ARSC) as part of its clarity project include a proposal that would significantly change compilation literature. An exposure draft (ED) invites public comment on the proposals. The ED includes: A proposed, revised compilation standard that would
Affordable Care Act holds opportunities, challenges for internal auditors
Health care regulations associated with the Patient Protection and Affordable Care Act (PPACA), P.L. 111-148, have created new opportunities for internal auditors. But internal auditors may need to get more familiar with PPACA’s provisions to help their organizations understand the risks associated with the law and their organization’s preparedness to
PCAOB establishing Center for Economic Analysis
The PCAOB is establishing a Center for Economic Analysis to advise the board on how economic theory, analysis, and tools can enhance the effectiveness of the board’s programs. University of Chicago economist Luigi Zingales will be the founding director of the center, which will promote and encourage economic research related
When the rules and the law no longer agree
In 2012, a form required by the New York City Tax Commission left auditors in a quandary. Recent changes to GAAS that revised the wording of the auditor’s report had not been reflected in the form. As a result, the form required auditors to submit a report to the Tax
PCAOB standard for auditing revenue may be on the horizon
Auditing revenue will need to be an area of focus for PCAOB standard setting in the near future, PCAOB member Jay Hanson said in a speech Monday. FASB and the International Accounting Standards Board are in the closing stages of developing a converged financial reporting standard for revenue recognition. The
PCAOB continues focus on audits of internal control over financial reporting
The PCAOB maintained its focus on audits of internal control over financial reporting (ICFR) Thursday by issuing its second report in 11 months on the subject. Staff Audit Practice Alert No. 11, Considerations for Audits of Internal Control Over Financial Reporting, discusses application of PCAOB standards to audits of internal
UK regulator creates 10-year retendering requirement
Companies in the U.K. FTSE 350 will be required to place their audit contracts out for bid every 10 years under new rules announced Tuesday by the U.K. Competition Commission (CC). The rules represent a softening of the five-year mandatory retendering proposed earlier by the CC. Some businesses and regulators,
PCAOB approves standards for auditors of broker-dealers
The PCAOB on Thursday approved new standards for auditors of brokers and dealers. Two new attestation standards are designed to help protect customer funds by establishing rules for examinations and reviews of compliance information that broker-dealers submit to the SEC. A new auditing standard applies to procedures performed and reporting
ARSC to propose new preparation, compilation, association standards
From Staff Reports Three new standards the AICPA Accounting and Review Services Committee (ARSC) voted Thursday to propose would help practitioners clearly distinguish between preparation and reporting services. ARSC voted to expose for public comment proposals titled Preparation of Financial Statements, Compilation Engagements, and Association With Financial Statements. An exposure
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