PCAOB
Here’s What’s On the Updated PCAOB Standard-Setting, Rulemaking Agendas
Year-end standard-setting projects include NOCLAR, audit firm and engagement metrics, and reporting in specified circumstances.
Nov. 07, 2024
Public Company Accounting Oversight Board (PCAOB) staff on Nov. 4 posted updated standard-setting and rulemaking agendas for the rest of 2024 and for the new year.
Short-Term Standard-Setting Projects
| Project | Project Description | Next Board Action | Anticipated Timing |
|---|---|---|---|
| Noncompliance with Laws and Regulations (NOCLAR) | Consider changes to an auditor’s consideration of possible noncompliance with laws and regulations including how AS 2405, Illegal Acts by Clients, should be revised to integrate a scalable, risk-based approach that takes into account recent developments in corporate governance and internal control practices. | Adoption | 2024 |
| Attestation Standards Update | Consider the requirements in the interim attestation standards in connection with the PCAOB’s interim standards project. | Proposal | 2025 |
| Going Concern | Consider the auditor’s evaluation and reporting of a company’s ability to continue as a going concern in response to changes in financial reporting, the auditing environment, and stakeholder needs, including by considering how AS 2415, Consideration of an Entity’s Ability to Continue as a Going Concern, should be revised. | Proposal | 2025 |
| Firm and Engagement Metrics | Enhance information provided to investors, audit committees, and other stakeholders at both the firm and engagement level. | Adoption | 2024 |
| Substantive Analytical Procedures | Consider changes to an auditor’s use of substantive analytical procedures to better align with the auditor’s risk assessment and to address the increasing use of technology tools in performing these procedures, including whether to revise AS 2305, Substantive Analytical Procedures. | Adoption | 2025 |
| Inventory | Consider updates to AS 2510, Auditing Inventories, in connection with the Interim Standards project to reflect changes in the auditing environment. | Proposal | 2025 |
| Auditor Reporting in Specified Circumstances | Consider updates to AS 3105, Departures from Unqualified Opinions and Other Reporting Circumstances, and other interim standards in the AS 3300 series. | Proposal | 2024 |
Mid-Term Standard-Setting Projects
| Project | Project Description |
|---|---|
| Fraud | Consider how AS 2401, Consideration of Fraud in a Financial Statement Audit, should be revised to better align an auditor’s responsibilities for addressing intentional acts that result in material misstatements in financial statements with the auditor’s risk assessment, including addressing matters that may arise from developments in the use of technology. |
| Interim Ethics and Independence Standards | In connection with the PCAOB’s interim standards project, consider whether PCAOB registered firms and their associated persons existing obligations should be enhanced and updated to better promote compliance through improved ethical behavior and independence. |
| Use of a Service Organization | Consider how AS 2601, Consideration of an Entity’s Use of a Service Organization, should be amended to reflect changes in how companies use services of third parties that are relevant to the company’s own internal controls over financial reporting and developments in practice. |
| Interim Financial Information Reviews | Consider updates to AS 4105, Reviews of Interim Financial Information, in connection with the Interim Standards project to reflect changes in the auditing and reporting environment. |
| Internal Audit | Consider updates to AS 2605, Consideration of the Internal Audit Function, in connection with the Interim Standards project to reflect changes in the auditing and reporting environment. |
| Subsequent Events and Other Matters Arising After the Date of the Auditors Report | Consider updates to interim standards that address auditor responsibilities related to (i) certain events occurring between the balance sheet and the auditor’s report date and (ii) certain matters arising after the auditor’s report date, such as subsequently discovered facts and reissuance of the auditor’s report. This project considers updating AS 2801, Subsequent Events, AS 2905, Subsequent Discovery of Facts Existing at the Date of the Auditor’s Report, and certain other interim standards. |
| Interim Standards | Consider whether the remaining “interim” standards, as adopted upon the establishment of the Board, should be amended, replaced, or eliminated, as appropriate. As part of this analysis, evaluate which standards are necessary to retain, and of those, which should be retained with minimal updates and which require more significant changes. Separate projects, including requests for comment on potential standards to eliminate, will be added to the standard-setting agenda as the staff completes its analysis. |
Rulemaking Projects
| Project | Project Description | Next Board Action | Anticipated Timing |
|---|---|---|---|
| Firm Reporting | Consider changes to audit firm reporting requirements including periodic reporting requirements, special reporting requirements, and other enhancements to the audit firm reporting framework. | Adoption | 2024 |
| Registration | Consider changes to enhance the PCAOB’s registration program. | Adoption | 2024 |