Yesterday, SEC Chair Jay Clayton, SEC Chief Accountant Sagar Teotia and Corp Fin Director William Hinman posted a “Statement on Role of Audit Committees in Financial Reporting and Key Reminders Regarding Oversight...more
Recently, SEC Chief Accountant Sagar Teotia hinted at possible forthcoming changes to the auditor independence rules, remarking that, in connection with the recent changes related to lending relationships, the SEC “also...more
Studies of former partners of audit firms that have assumed management positions at audit clients have raised concerns, at least pre-SOX, about potentially lower audit quality, perhaps reflecting hesitation by the audit firm...more
Yikes! What is going on at the PCAOB? You may recall that, back in 2018, former staffers at the PCAOB and former partners of KPMG were charged by the SEC in connection with “their participation in a scheme to misappropriate...more
In this report, Critical Audit Matters: Public company adaptation to enhanced auditor reporting, Intelligize examines data from a survey, conducted by SourceMediaResearch/Accounting Today, of 171 compliance specialists at...more
Last week, the SEC announced settled charges against PwC and one of its audit partners for violations of the auditor independence rules. As described in the Order, the violations included “performing prohibited non-audit...more
The SEC’s Office of Chief Accountant has updated its FAQs regarding auditor independence. The new and revised questions relate to the general standard for independence, prohibited non-audit services, partner rotation,...more
By now, we all know that, sooner or later, audit reports for most public companies will be required to disclose critical audit matters, which are intended to make the audit report more informative for investors. But, as this...more
AS 3101, the new auditing standard for the auditor’s report that requires disclosure of critical audit matters, is effective for audits of large accelerated filers for fiscal years ending on or after June 30, 2019. And that...more
The PCAOB has just released a new resource for audit committees about critical audit matters, designed to “inform audit committees as they engage with their auditors on the new CAM requirements.” The new auditing standard for...more
An article in the Federal Securities Law Reporter reports on some tips gleaned from a discussion of, what else, “critical audit matters” on a PCAOB panel at PLI’s 34th Midyear SEC Reporting and FASB Forum. The new auditing...more
The SEC has adopted final amendments to the auditor independence rules relating to lending relationships between the auditor and an audit client or certain shareholders of the audit client. As noted in the press release, the...more
The PCAOB has just published new guidance on auditors’ communication of critical audit matters in the auditor’s report. The guidance includes some new FAQs related to how auditors should describe their principal...more
[This post has been updated primarily to reflect the contents of the proposing release as well as the statement of Commissioner Hester Peirce.]
Those of you who expected the SEC to go big and propose raising the current...more
As you may recall, auditors of large accelerated filers will be required to report on CAMs—critical audit matters—in their auditor’s reports for fiscal years ending on or after June 30, 2019 and in auditor’s reports for all...more
To fulfill their oversight responsibilities, audit committees typically evaluate the outside auditor at least annually to determine, in part, whether the auditor should be engaged for the subsequent fiscal year. The Center...more
In this PCAOB staff inspection brief, issued at the end of last week, the PCAOB discusses its new strategic plan, which includes conducting “an ongoing dialogue” with audit committee chairs when their companies’ audits are...more
Internal auditors are worried that boards are not paying enough attention to—wait for it—internal auditors. Probably most often, we consider the internal audit function in the context of financial reporting, but its brief can...more
As you may recall, auditors of large accelerated filers will be required to report on CAMs—critical audit matters—in their auditor’s reports for fiscal years ending on or after June 30, 2019 and in auditor’s reports for all...more
The Center for Audit Quality, working with Audit Analytics, has just released a new edition of its annual Audit Committee Transparency Barometer, which, over the past five years, has measured the robustness of audit committee...more
You probably recall that, under SOX 404(b), all public reporting companies, other than non-accelerated filers, are required to obtain an auditor attestation regarding the effectiveness of their internal control over financial...more
Are we just reading the wrong newspapers and reports or does it seem that auditors—although they spend hours and hours performing audits—rarely identify instances of fraud? Most companies rely on their auditors to uncover...more
Here’s a reminder from the SEC: interim financial statements included in Forms 10-Q are required to be “reviewed” by outside auditors. On Friday, in a first enforcement proceeding of its kind, the SEC announced charges...more
In this speech before the 36|86 Entrepreneurship Festival in Nashville, Tennessee, SEC Chair Jay Clayton discussed, among other topics, the coming agenda for public companies designed to “encourage capital formation for...more
In October 2017, the SEC approved the PCAOB’s new auditing standard for the auditor’s report, AS 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, which will...more