PCAOB Auditing Standard AS 2501- Auditing Accounting Estimates, Including Fair Value Measurements

Posted by John Braun on Nov 8, 2019 1:03:00 PM

The new standard (AS 2501), which is effective for fiscal years ending on or after December 15, 2020, replaces three existing standards relative to auditing accounting estimates. While this replacement implies that much of the content already existed, the PCAOB has adopted this standard because the use of complex accounting estimates and fair value measurements continues to grow. Their oversight activities have revealed a pattern of audit deficiencies in these areas of the audit that are also often some of those areas with the greatest audit risk.

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PCAOB Provides Updates on Auditor Reporting

Posted by John Braun on Sep 7, 2018 4:03:56 PM

On August 23, 2018, the PCAOB provided supplemental information to PCAOB Release No. 2017-001, The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion and Related Amendments to PCAOB Standards.

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An Audit Partner Asks… What Are the True Drivers of Audit Quality? Reaction to the PCAOB’s Adoption of New Rules Requiring Engagement Partner Disclosure

Posted by John Braun on Apr 15, 2016 1:30:00 PM

Subject to the approval of the SEC, new PCAOB rules will require individual audit partner disclosure on audit reports issued after June 30, 2017, along with other information regarding other accounting firms participating in the audit. The disclosure will take place in a filing separate from that which includes the Report of the Registered Public Accounting Firm - Form AP.

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What You Need To Know About Proposed Changes to the Auditors' Reporting Model

Posted by admin on Oct 11, 2013 3:06:44 PM

Late this summer, the Public Company Accounting Oversight Board (PCAOB) released for public comment drastic changes to the auditors’ reporting model. These changes would be accomplished through two new auditing standards. The first proposed auditing standard- The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion- establishes requirements regarding the content of the auditor’s written report. The second proposed auditing standard- The Auditor’s Responsibilities Regarding Other Information in Certain Documents Containing Audited Financial Statements and the Related Auditor’s Report- establishes requirements regarding the auditor’s responsibilities with respect to information, other than the audited financial statements and the related auditor’s report, in a company’s annual report that is filed with the SEC under the Securities Exchange Act of 1934 and contains that company’s audited financial statements and the related auditor’s report.

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Adviser Custody Rule Update- What You Need to Know About the SEC's Recent Risk Alert

Posted by admin on Apr 1, 2013 7:01:48 PM

It has been more than two years since the Securities and Exchange Commission (“SEC”) adopted amendments to Rule 206(4)-2 of the Investment Advisers Act of 1940 (the “Custody Rule”). While the initial response to the amendments from advisors and broker-dealers was mixed (See our previous post Initial Response to the Revised Custody Rule), it is imperative for advisors to ensure they are in compliance. On March 4, 2013, the SEC issued a Risk Alert and Investor Bulletin regarding the Adviser Custody Rule. The alert was issued in response to recent SEC examinations conducted as part of a National Examination Program that uncovered custody-related issues in around one-third of the advisors examined.

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PCAOB Issues New Standard for Auditor Communications With Audit Committees: What You Need To Know

Posted by admin on Sep 11, 2012 4:50:34 PM

Effective two-way communication between audit committees and external auditors is an integral part of the audit process. Such communications improve the ability of the audit committee to provide oversight and provide an opportunity for the auditors to discuss relevant matters with a forum other than management. These types of communications are essential to a high quality audit.

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PCAOB Issues New Guidance for Audit Committees on Audit Firm Inspections

Posted by admin on Aug 16, 2012 12:13:00 PM

The Public Company Accounting Oversight Board (“PCAOB”) recently issued PCAOB Release No. 2012-003 containing information for audit committees about the PCAOB inspection process. The formation of the PCAOB was one of the oversight changes which came out of the Sarbanes-Oxley Act of 2002 (“the Act”). The reason behind this release seems to be twofold, one is to assist audit committees in understanding the inspection process and the other is to assist them in gathering information from the audit firms about their inspections.

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Investment Management Group Partner Mike Boyle Comments on New Guidance from the PCAOB for Audit Committees in "Ignites"

Posted by admin on Aug 10, 2012 4:59:00 PM

Mike Boyle, a partner in BBD's Investment Management Group, provided commentary in an article in "Ignites" written by Beagan Wilcox Volz on the PCAOB's recent guidance for audit committees regarding the inspection of audit firms. In "PCAOB Helps Funds Challenge Stonewalling Auditors," Boyle addresses BBD's philosophy regarding discussion of the results of PCAOB inspections with clients.

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The PCAOB's Proposal For Transparency and Accountability

Posted by Investment Management Group on Dec 6, 2011 6:55:48 PM

Due to the recent events in the national and global business world, there has been an outcry for transparency and accountability from big business. In this spirit, the Public Company Accounting Oversight Board (PCAOB) has issued PCAOB Release No. 2011-007. The proposal suggests three amendments to the PCAOB requirements of registered public accounting firms and their public-company audit reports:

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PCAOB Proposes Changes to the Auditor's Reporting Model

Posted by Investment Management Group on Sep 21, 2011 11:38:44 PM

On June 21, 2011, the PCAOB issued a concept release that may change the auditor’s reporting model as we know it. The concept release results from an “outreach” project concerning the effectiveness of the auditor’s reporting model conducted by the PCAOB staff from October 2010 through March 2011. The purpose of the concept release is to present a number of alternative potential changes to the auditor’s reporting model with a goal of increasing transparency and proving more relevant information to investors. The concept release offers four alternative changes to the current reporting model. Included among them, and easily viewed as the largest component of the proposed concept with the potential to drastically change the reporting model, is the addition of an auditor’s discussion and analysis of the financial statements (“AD&A”). The AD&A will give the auditor the ability to discuss significant matters that may not otherwise be expressed in the strict layout of the opinion language. This could include an explanation of the audit procedures performed, a statement stressing the independence of the auditor, or even the auditor’s overall view of the statements themselves. Other potential modifications to the reporting model included in the concept release are the expanded use of emphasis paragraphs, required auditor assurance on information ranging beyond the financial statements, and modification of the standard wording used throughout the opinion. All of these proposed concepts have one thing in mind: to ensure auditor’s communications are transparent to the investor. Further, the concept release makes it clear that these four alternatives are not mutually exclusive. Any changes to the auditing standards could include one or any combination of these components. The PCAOB also notes that there may be other alternative changes to consider, which will presumably come through the comment process. Written comments on the concept release are due to the PCAOB by September 30, 2011.

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