The Public Company Accounting Oversight Board (PCAOB) announced December 20, 2012, that the Securities and Exchange Commission (SEC) approved Auditing Standard No. 16, Communications with Audit Committees, and amendments to other PCAOB standards.
The new standard and related amendments are effective for public company audits of fiscal periods beginning on or after December 15, 2012. Additionally, the SEC determined that the standard and related amendments will apply to audits of "emerging growth companies" under the Jumpstart Our Business Startups Act of 2012.
"Auditing Standard 16 supports the critical role of auditors and audit committees in financial reporting", said PCAOB Chairman James R. Doty. "The standard moves the auditor's communication with the audit committee away from compliance checklists and decisively in the direction of meaningful, effective interchange."
The standard establishes requirements that enhance the relevance and timeliness of the communications between the auditor and the audit committee and is intended to foster constructive dialogue between the two on significant audit and financial statement matters.
The standard supersedes the Board's interim auditing standards AU sec. 310, Appointment of the Independent Auditor; and AU sec. 380, Communication with Audit Committees; and amends other PCAOB standards.
The PCAOB adopted the new standard on August 15, 2012. The SEC approved the standard on December 17, 2012.
SOURCE: PCAOB Press Release