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PCAOB Adopts New Risk Assess. Stds; Issues Release on Failure to Supervise - GUEST POST by Francine McKenna

Aug 6th 2010
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Following is a GUEST POST from my BBF (Best Blogger Friend), Francine McKenna, Managing Editor of the popular blog RE: The Auditors. I am on vacation the next two weeks and am pleased to have Francine kick off some guest posts from other bloggers. Visit her blog at http://www.retheauditors.com/ and on twitter at www.twitter.com/retheauditors.

If you are a blogger interested in potentially providing a guest post in the FEI blog during the next few weeks, please contact me by email at [email protected].

Reported by Francine McKenna, Guest Blogger today:

The Public Company Accounting Oversight Board held an Open Meeting this morning, Aug. 5 to address the following important items of business:

 

  • The adoption of eight auditing standards and related amendments that would revise the requirements for assessing and responding to risk during an audit., to cover two important issues, and

    A proposed release to address the PCAOB’s obligation under the Sarbanes-Oxley Act of 2002 to impose disciplinary sanctions on registered public accounting firms and their supervisory personnel who fail to reasonably supervise associated persons.

PCAOB Board Unanimously Adopts Suite of Risk Assessment Standards
The Board voted unanimously to adopt the suite of risk assessment standards, Auditing Standards No. 8 through No. 15. These standards were originally proposed on Oct. 21, 2008, and then reproposed in revised form on Dec. 17, 2009. Here is a link to the press release.
 

PCAOB Issues Release on Failure to Supervise
The Board also unanimously agreed to issue a release to address the PCAOB’s obligation under the Sarbanes-Oxley Act of 2002 to impose disciplinary sanctions on registered public accounting firms and their supervisory personnel who fail to reasonably supervise associated persons. Here is a link to the press release. The PCAOB’s proposed release highlights Section 105(c)(6) of the Act and seeks comment on conceptual approaches to rulemaking that would complement its application.

Through its inspections and investigations, the PCAOB has observed that supervision processes within firms are frequently not as robust as they should be, and that supervisory responsibilities are often not as clearly assigned as they should be," said PCAOB Acting Chairman Daniel L. Goelzer. "Today's Release seeks to highlight the Board’s views on the scope for using the authority provided in the Act to address those problems." The comment period on this release is open until Oct. 4, 2010.

PCAOB Request to Amend Sarbox

Read more here, about what Acting Chairman Goelzer said about a potential PCAOB request to Congress to amend a portion of the Sarbanes-Oxley Act, and further details on the above two items.

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