PCAOB

PCAOB adopts new audit committee communication rule and amends tax services rule

The PCAOB voted last week to adopt Rule 3526, Communication with Audit Committees Concerning Independence, and an amendment to Rule 3523, Tax Services for Persons in Financial Reporting Oversight Roles. The Board adopted Rule 3526 to enhance communication between audit committees and registered firms regarding the firm's independence.

PCAOB cites deficiencies in Grant Thornton audits

The Public Company Accounting Oversight Board (PCAOB) has found deficiencies in five audits conducted by Grant Thornton.Grant Thornton failed "to identify or appropriately address errors in the issuer's application of GAAP," said the PCAOB, which acts as an audit watchdog and annually inspects accounting firms with more than 100 public-company clients.Grant Thornton also did not perform certain audit tests to back up its opinions, the April 4 report said."In some c
A&A

PCAOB announces small business audit forums

The Public Company Accounting Oversight Board has announced the 2008 series of its Forums on Auditing in the Small Business Environment. These forums are designed to help share important information with registered public accounting firms and public companies operating in the small business community. The 2008 agenda will include a discussion of practical quality control policies and procedures and evolving accounting and auditing issues. The discussions also will address the application of certain auditing standards and observations from the Board's disciplinary orders.
A&A

PCAOB approves Auditing Standard No. 6 in response to FASB 154

The Public Company Accounting Oversight Board has voted to adopt Auditing Standard No. 6, Evaluating Consistency of Financial Statements, and an accompanying set of amendments to the Board's interim auditing standards. The Board adopted the standard and amendments in light of the Financial Accounting Standards Board's (FASB) issuance of Statement of Financial Accounting Standards No. 154, Accounting Changes and Error Corrections, and impending issuance of Statement of Financial Accounting Standards, The Hierarchy of Generally Accepted Accounting Principles.
Community News

PCAOB fines Deloitte $1 million

Deloitte & Touche has agreed to pay a $1 million penalty to settle accusations by the Public Company Accounting Oversight Board (PCAOB) that it allowed a partner who had performed poor audits in the past to conduct the 2003 audit of Ligand Pharmaceuticals, a public company based in San Diego. Under a provision of the Sarbanes-Oxley Act of 2002, the money will be used for accounting scholarships.The Deloitte partner, James L.

PwC defends audits faulted by PCAOB

PricewaterhouseCoopers LLC (PwC), in an occasionally strongly worded letter addressed to the Public Company Accounting Oversight Board (PCAOB), defended the quality of the six audits found to have deficiencies in the PCAOB's Report on 2006 Inspection of PricewaterhouseCoopers LLC, released October 18th.

PCAOB explains how auditors can apply AS No. 5

The Public Company Accounting Oversight Board has published for public comment staff guidance on auditing internal control over financial reporting in smaller public companies. The guidance explains how auditors can apply the Board's internal control auditing standard, Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements, to audits of smaller, less complex public companies. When it adopted Auditing Standard No.

PCAOB approves rules for firms that do not regularly issue audit reports

The Public Company Accounting Oversight Board has approved amendments regarding the inspection frequency for firms that do not regularly issue audit reports. The Board adopted two amendments to PCAOB Rule 4003, which addresses the minimum frequency with which the Board will conduct inspections of different categories of registered public accounting firms. The amendments approved today would eliminate Rule 4003's requirement that the Board regularly inspect each registered public accounting firm that plays a "substantial role" in audits but does not issue audit reports.

SEC charges 69 auditing firms and partners with SOX violation

The Securities and Exchange Commission has issued 69 charges against various accounting firms and partners for violation of a provision of the Sarbanes-Oxley (SOX) Act that requires registration with the Public Company Accounting Oversight Board (PCAOB). Thirty-seven separate firms were involved in the action. No Big Four or major accounting firms were among those charged. This is the first time the SEC has issued such charges. The SEC indicated that 53 audit reports of public companies were issued by those firms and partners who has not registered as required by SOX.

SEC approves PCAOB Auditing Standard No. 5

The Securities and Exchange Commission has voted unanimously in favor of a new auditing standard and other measures to increase the accuracy of financial reports while reducing unnecessary costs, especially for smaller public companies.The Commission expects the new auditing standard, in combination with the Commission's new management guidance, will make Section 404 audits and management evaluations more risk-based and scalable to company size and complexity."In approving Auditing Standard No.

PCAOB to consider proposing new rules

The Public Company Accounting Oversight Board has scheduled an open meeting for 9:30 a.m. Tuesday, July 24, 2007, in the Board’s meeting room at 1666 K St. NW, Washington, D.C. The Board will consider proposing an ethics and independence rule concerning communication with audit committees that would supersede the Board's interim independence requirement, Independence Standards Board Standard No.
Community News

Grant Thornton, PCAOB spar over inspection report

The PCAOB has released its inspection report on CPA firm Grant Thornton covering the period from May 2006 through January 2007. Audits of eight companies were examined. Several audit deficiencies are noted in the report, such as a failure to identify or appropriately address errors in the application of GAAP in the selected audits, including errors that seemed likely to be material to financial statements.

New SOX guidelines benefit small businesses: costs uncertain

The new standard for audits of public companies under section 404 of the Sarbanes Oxley Act, Accounting Standard No. 5, released by the Public Company Accounting Oversight Board (PCAOB) last month, should ease the burden of compliance for small businesses, but critics continue to press for delay in implementation.

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.

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