Board Proposes Two Auditing Standards, Amendment to Interim Auditing Standards

The Public Company Accounting Oversight Board today voted unanimously to propose for public comment two auditing standards and an amendment to an interim auditing standard at its open board meeting.

The first proposed auditing standard, Audit Documentation, would establish general requirements for documentation the auditor should prepare and retain in connection with any public company audit. Section 103 (a)(2)(A)(i) of the Sarbanes-Oxley Act of 2002 expressly directs the Board to establish auditing standards that require registered public accounting firms to prepare and maintain, for at least seven years, audit documentation "in sufficient detail to support the conclusions reached" in the auditor's report. The Board also voted to propose related amendments to the interim auditing standards. The proposed standard and amendments would apply to engagements completed on or after June 15, 2004. The Board will accept comments for 60 days.

The Board also voted unanimously to propose an auditing standard to require registered public accounting firms expressly to state in each public company audit report that the audit was conducted in accordance with the standards of the Public Company Accounting Oversight Board. This proposed standard would apply to auditors' reports dated on or after the later of Jan. 1, 2004, or the 10th day after final approval of this auditing standard. The Board will accept comments on this proposal for 21 days.

Proposals and comments will be available on the Board's Web site at www.pcaobus.org under Rulemaking. Briefing papers on these proposals will be posted on the Web site under Rulemaking. Any final standard or amendment adopted will be submitted to the Securities and Exchange Commission for approval pursuant to the Sarbanes-Oxley Act.

The archived webcast of the meeting can be found here.