PCAOB

PCAOB approves internal audit standard

The Public Company Accounting Oversight Board Thursday voted to adopt a standard that replaces its previous internal control auditing standard, Auditing Standard No. 2 (AS2). The new standard, entitled "Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements" is principles-based.

PCAOB to vote on final audit standards

On May 24, the Public Company Accounting Oversight Board (PCAOB) will vote on a final standard on auditing internal control over financial reporting, as well as a related independence rule and conforming amendments to the board's auditing standards. If adopted, the new standard would supersede the board's existing auditing standard, Auditing Standard No. 2, "An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements."The board also will vote on two recommendations to amend the board's rules on the frequency of inspections.

PCAOB Names External Relations Director

The PCAOB Board announced that Mary Moore Hamrick has been named Director of the newly established Office of External Relations, where she will lead the Board’s communications program. The Offices of Public Affairs and Government Relations now are consolidated under the Office of External Relations, and report to Hamrick. To head those offices, the PCAOB also announced today that two new Deputy Directors have joined the Board: Colleen Brennan, Deputy Director of Public Affairs, and Kent Bonham, Deputy Director of Government Relations.

PCAOB Issues Year 2 Auditor Standard Implementation Report

The Public Company Accounting Oversight Board issued a report on the second year implementation of its Auditing Standard No. 2, An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements ("AS No. 2"). The report is based on PCAOB inspections that looked at portions of approximately 275 audits of internal control over financial reporting (ICFR) by registered public accounting firms. In May 2006, PCAOB announced that during 2006 it would conduct inspections to determine whether auditors were achieving the objectives of AS No.
Community News

Oxley Unhappy with SOX; Blames PCAOB for Problems

Former Congressman Michael Oxley is unhappy with implementation of the corporate reform legislation that bears his name.In an interview with CFO.com, he was asked, “Are you happy with the way Sarbanes-Oxley has been implemented?” His answer: “Not really. The law has gotten a lot of criticism.” He noted that the vast majority of the complaints center on Section 404, which requires an audit of internal controls over financial reporting.“It was Auditing Standard No. 2, promulgated by the PCAOB (Public Company Accounting Oversight Board), that started all the problems,” he said.
Community News

Deputy Chief Auditor to Leave PCAOB

The PCAOB announced that Laura J. Phillips, Deputy Chief Auditor, will leave the Board later this year. Phillips has been responsible for providing technical direction on the development of the Board’s standards, including ensuring that standards and guidance were communicated to auditors of public companies and other interested parties. Most recently, Phillips led the PCAOB’s efforts to facilitate implementation of the internal control reporting requirements of the Sarbanes-Oxley Act. Phillips has not yet accepted another position.“Laura has been a key member of our team.
A&A

SEC Seeks Small Business SOX Relief

In a move designed to benefit smaller companies, the SEC endorsed recommendations to eliminate waste and duplication with SOX compliance.The new PCAOB standard will be submitted for SEC review by early June, in time for the 2007 financial statement audits.The SEC staff will be working closely with the PCAOB to make the internal controls provisions of SOX Section 404 more efficient and cost effective.

Audit Standards on PCAOB Open Meeting Agenda

The Public Company Accounting Oversight Board (PCAOB) said it will consider proposing an auditing standard, Evaluating Consistency of Financial Statements, and related amendments to the board's interim standards regarding the auditor's responsibilities to evaluate and report on matters relating to the consistency of the financial statements.

Court Throws Out PCAOB Lawsuit

A federal judge has dismissed a lawsuit seeking to invalidate the Public Company Accounting Oversight Board (PCAOB) on constitutional grounds.The Free Enterprise Fund said in a statement that it will appeal the decision. The 2006 suit, which was also brought by the Competitive Enterprise Institute and a small audit firm, contends that the PCAOB violates the appointments clause of the U.S. Constitution because the Securities and Exchange Commission does not have the power to appoint PCAOB members.U.S.

PCAOB Chair, EU Commissioner Discuss Audit Firm Oversight

PCAOB Chairman Mark Olson and EU Commissioner Charlie McCreevy met to discuss steps to enhance cooperation between the PCAOB and European auditor oversight bodies and advance collaborative efforts in 2007. Chairman Olson and Commissioner McCreevy agreed to launch roadmap discussions on cooperation between the PCAOB and EU regulators. They have mandated their staff to commence work and will review progress at their next meeting. The goal is to enable the PCAOB and EU auditor regulators that have independent and rigorous oversight systems to move toward full reliance by 2009.
Community News

Arguments Begin Thursday Over PCAOB Constitutionality

A federal judge will hear arguments Thursday in a lawsuit that attacks the Public Company Accounting Oversight Board (PCAOB) as unconstitutional.Advertisement

PCAOB Adds Inspection Rules Changes to Open Meeting Agenda

The Public Company Accounting Oversight Board (PCAOB) will consider whether to adopt a rule temporarily adjusting the minimum frequency with which the Board inspects registered public accounting firms having 100 or fewer issuer audit clients, at the open meeting scheduled for 9:30 a.m. Tuesday, December 19, 2006, in Washington, D.C.

Revised ALLL Policy Gets Nod From PCAOB

The Public Company Accounting Oversight Board (PCAOB) gave its blessing to the latest Policy Statement on the Allowance for Loan and Lease Losses (ALLL), issued this week.The interagency policy statement on ALLL, developed by federal banking and credit union regulators, updates the 1993 statement and outlines expectations for banks and examiners in regards to the development and assessment of the ALLL estimate.“The policy statement outlines enhanced guidance on the sound management practices that are expected to be employed in the development of the allowance for loan and lease losses
A&A

SEC Proposes Risk-Based Analysis of Financial Controls

The Securities and Exchange Commission (SEC) voted unanimously on Wednesday to allow public companies subject to the requirements of Sarbanes-Oxley (SOX) to evaluate the design of only those financial controls that might carry the risk of having a material impact on financial statements.
A&A

SEC and PCAOB Still Working on Sarbanes-Oxley Changes

Christopher Cox, the Securities and Exchange Commission (SEC) Chairman, said Monday that regulators were still working on revisions to its rule requiring companies to adopt internal controls and procedures for financial reporting but said he was “confident” that the result would “improve the reliability of public company financial statements and better protect investors,” the Washington Post reports. The SEC will issue its proposed revision on December 13.
Community News

PCAOB Budget Projects Staff Increase of 39

The Public Company Accounting Oversight Board (PCAOB) submitted a 2007 budget proposal of $136.4 million, which would be an increase of $5.5 million or about a half a percent over the current budget.Advertisement
A&A

SEC, PCAOB Chairmen Differ Over SOX 404 Changes

Securities and Exchange Commission (SEC) Chairman Christopher Cox and the Public Accounting Oversight Board’s (PCAOB) Chairman Mark Olson were reported to be planning to meet, possibly as early as Sunday, to discuss differences in their approaches to revising Section 404 of the Sarbanes-Oxley Act (SOX), Reuters reports. Early in November the PCAOB sent a draft audit revision to the SEC that did not win SEC approval because it did not meet the concerns of small businesses, unnamed sources told Reuters.
Community News

PCAOB Adviser Implicated in Questionable Transaction

The former employer of a Public Company Accounting Oversight Board (PCAOB) advisor has filed an insurance claim blaming the board member for breaches of fiduciary duties regarding a real estate purchase.Advertisement

Amendments to AS2 Aim To Rethink Auditor’s Role

The Public Company Accounting Oversight Board (PCAOB) submitted a draft of changes for its Auditing Standard 2 (AS2) to the Securities and Exchange Commission (SEC) back in September. AS2 has been criticized for its conservative use by auditors, according to CFO.com.
Practice Management

PCAOB Issues Fair Value Auditing Guidance

The Public Company Accounting Oversight Board (PCAOB) on Tuesday issued staff questions and answers providing direction for auditing a company’s estimation of the fair value of stock options granted to employees pursuant to Statement of Financial Accounting Standards No. 123 (Revised), Share-Based Payment (FAS 123R).This series of questions and answers is limited to addressing auditing the fair value measurements associated with determining compensation cost.

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