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PCAOB Proposes Public Comment on New Audit Standards

The Public Company Accounting Oversight Board has released for public comment a new auditing standard and related amendments that are intended to enhance the auditor’s reporting model.

The proposed standard model would retain the pass/fail grading in the current auditor’s report, but also require the auditor to convey additional “other information” to investors and other financial statement users about the audit and the auditor. Among the proposed “other information” requirements are:

• the communication of critical audit matters as determined by the auditor;
• addition of new elements to the auditor’s report related to auditor independence,  tenure, responsibilities, and results of auditor’s evaluation of other information outside the financial statements; and
• enhancements to existing language in the auditor’s report related to the auditor’s responsibilities for fraud and note to the financial statements.

James R. Doty, PCAOB Chairman believes “[the] proposed changes will make the auditor’s report more relevant to investors.”

Comments on the proposed standards and related are due by December 11, 2013. To read the PCAOB’s press release for public comments, click here.