The Public Company Accounting Oversight Board’s proposed auditing standards feature major implications for ESG that could upend corporate audits.

On June 6, 2023, the Public Company Accounting Oversight Board (PCAOB), the nonprofit corporation established by Congress to oversee the audit of public companies, proposed new auditing standards designed to further its “investor-protection mandate.” These standards, if adopted, would heighten requirements for auditors to identify, evaluate, and communicate regarding a company’s possible or actual noncompliance with laws and regulations, as described in more detail below.