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. The first recommendation is to propose for public comment an amendment to Rule 4003. The amendment would remove the requirement that the board regularly inspect each registered public accounting firm that plays a "substantial role" in audits but does not issue audit reports. The Sarbanes-Oxley Act only requires the board to inspect registered firms that regularly issue audit reports.

The second recommendation is a staff proposal for the board to vote on whether to keep Rule 4003(d) in place beyond the June 30, 2007, tentative sunset date. The board set the sunset date when it adopted the rule on Dec. 19, 2006, to allow for public comment before making a final determination on the new provision. Rule 4003(d) extends the time period during which the board must conduct the first and second inspections of firms that registered in 2003 and 2004. Neither amendment would affect the annual inspection cycle for firms that audit more than 100 issuers.

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