The Public Company Accounting Oversight Board (PCOAB) has approved the reorganization of its auditing standards to present a more logical and navigable organizational framework.
Before this proposal, two separate sets of standards have existed – the interim auditing standards and the board-issued auditing standards. Two different numbering systems have been used as a result, creating the need to reorganize the system.
The Board hopes that a streamlined framework will be more user-friendly for auditors. Under the reorganization, the individual standards will be grouped into the following categories:
- General auditing standards – Standards on broad auditing principles, concepts, activities and communications.
- Audit procedures – Standards for planning and performing audit procedures and for obtaining audit evidence.
- Auditor reporting – Standards for auditors' reports.
- Matters relating to filings under federal securities laws – Standards on certain auditor responsibilities relating to U.S. Securities and Exchange Commission (SEC) filings for securities offerings and reviews of interim financial information.
- Other matters associated with audits – Standards for other work performed in conjunction with an audit.
The board-approved amendments do not add new requirements or make any changes to the original requirements for performing and reporting on audits. The PCAOB is simply cleaning up their standards to be more approachable to those in the audit profession. Moving forward, any new standards will become new sections or paragraphs within the new, approved framework.
While these amendments have been approved by the Board, they must still be approved by the SEC. If the amendments are approved by the SEC, they will be effective as of December 31, 2016. The PCOAB website will be immediately updated after SEC approval so that firms can begin adjusting to the new numbering system.
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