The PCAOB today voted to repropose for comment seven auditing standards and related amendments that collectively would revise the requirements for assessing risk in an audit.
"A sound and sophisticated risk assessment is essential to performing an audit that affords investors reasonable assurance that financial statements are free of material error. Therefore, these seven standards – once finalized – will serve as the bedrock for much of the Board’s future standard setting," said Acting PCAOB Chairman Daniel L. Goelzer.
The PCAOB initially proposed these standards on October 21, 2008. The reproposed standards include changes made in response to comments received on the original proposal and other refinements. Like the original proposal, the reproposed standards would establish requirements for audit procedures performed throughout the audit, from the initial planning stages through the evaluation of the audit results in forming the opinion in the auditor's report.
The reproposed standards are intended to improve audits of issuers by enhancing the effectiveness of an auditor’s assessment of and response to risk. In integrated audits, improvements in the requirements related to risk assessment should enhance the integration of the audit of financial statements with the audit of internal control over financial reporting. In addition, the reproposed standards emphasize the auditor's responsibility to consider the risk of fraud throughout the audit and contain new requirements intended to improve an auditor’s evaluation of disclosures in financial statements.
The PCAOB is seeking comment on these reproposed standards for a 75-day period ending March 2, 2010. Interested persons are encouraged to submit comments. The Board will carefully consider all comments received before taking final action on the reproposed standards. Comments will be posted on the Web site, www.pcaobus.org, on the Rulemaking Docket under Rules Rulemaking Docket 026. Any new auditing standard or amendment to a PCAOB standard that is adopted will be submitted to the Securities and Exchange Commission for approval.
The proposing release, text of the reproposed auditing standards, and related amendments to PCAOB standards will be available on the Web site under Rulemaking Docket No. 026. An archive of the Webcast and a podcast of the Open Board Meeting also will be available later today on the Web site at (www.pcaobus.org).