The Public Company Accounting Oversight Board announced today that the U.S. Securities and Exchange Commission has approved PCAOB's Auditing Standard No. 7, Engagement Quality Review (EQR). AS 7 will be added to the PCAOB's Standards webpage, meantime you can refer to the final version of AS7 submitted to the SEC for its approval - which appears as Item 25 in PCAOB's Rulemaking Docket.
SEC Approval Process Mandated by Sarbanes-Oxley In creating the PCAOB, the Sarbanes-Oxley Act set forth a requirement that all final standards approved by the PCAOB board would be subject to approval by the SEC, after a separate notice and comment period engaged in at the SEC (in addition to the PCAOB's own notice and comment period on their own rule proposals).
Effective Date As noted in the PCAOB's announcement of the SEC's approval of AS7:
The standard is effective for engagement quality reviews of audits and interim reviews for fiscal years that began on or after Dec. 15, 2009.
Accordingly, for interim reviews of public companies that file financial reports on a calendar-year basis, the EQR standard is applicable beginning with the quarter ending March 31, 2010. The new EQR standard was adopted by the PCAOB on July 28, 2009.
Implementation Guidance Coming in the 'Near Future' The PCAOB's announcement added:
The SEC, in its order approving the EQR standard, encouraged the PCAOB to issue guidance on the standard’s documentation requirements.
The PCAOB plans to publish Staff Questions and Answers on implementation of the standard in the near future.
Read about comments submitted to the SEC on PCAOB's EQR standard here.