Audit

The board took three actions to update auditing standards and procedures, including the adoption of a change to an almost 20-year-old rule that tightens the standard of liability to “negligent” from “reckless” for an associated person who contributes to a firm’s violations.

The practice aid for accounting for and auditing of digital assets has new guidance on auditing the valuation of digital assets along with auditing procedures regarding their existence, rights, and obligations.

The statement offers new definitions of “other practitioner” and completes the suite of standards that firms performing A&A services are required to use to design and implement a QM system by Dec. 15, 2025, and to perform A&A services in accordance with for engagements beginning on or after that date.

PCAOB updates general auditor responsibilities, quality control rules
AS 1000, General Responsibilities of the Auditor in Conducting an Audit, replaces AICPA-provided standards, and QC 1000, A Firm’s System of Quality Control, considers the AICPA’s new quality management standards.

A PCAOB staff report considers the changing world of commercial real estate, offering advice for public company auditors that also applies to auditors outside of the PCAOB’s purview.

A new PCAOB report highlights how audit quality can be improved by root cause analysis — an approach the federal board eventually could require and one addressed in new AICPA quality management system standards.

The proposals, open for public comment through June 7, cover 11 firm and engagement metrics as well as new annual and special reporting requirements in five key areas.