I would like to join my fellow Board members in thanking the staff of the Office of the Chief Auditor for their thoughtful and thorough work on this project.
This project is intended to put PCAOB auditing standards — including standards issued by the Board, as well as the interim AICPA standards adopted by the Board in 2003 — into a consistent framework with an ultimate goal to make them more user-friendly and accessible for auditors and others. As explained by the staff, today's action by the Board is just the first step in what will be a multi-year effort to reorganize and, where needed, substantively amend the auditing standards.
The framework we are voting on today is about reorganizing the existing interim and PCAOB-issued auditing standards by topic with a single integrated numbering system. In other words, we would categorize the auditing standards into topic areas, generally following the flow of a typical audit, and renumber the standards accordingly. We are interested in comments on whether the proposed approach makes sense, whether we should consider any changes to the proposed categories, organization or numbering system, and whether the end-product toward which we are aiming will be an improvement over the current structure. Our ultimate goal, as always, is to improve audit quality and investor protection, and it is my hope that a more organized set of auditing standards will increase compliance by firms and enable the overseers of audits, including audit committees, to better understand the audit process and its requirements.
As a by-product of the reorganization, we are proposing certain conforming amendments to Rule 3101, Certain Terms Used in Auditing and Related Professional Practice Standards, and Rule 3200T, Interim Auditing Standards. The Board also is proposing certain related amendments to the PCAOB auditing standards — including updating some cross-references — and is proposing to rescind certain interim auditing standards that the Board believes are no longer relevant or necessary.
But there are several important issues that today's proposal does not address:
In short, what we are proposing today is a starting point for a more logical organization of the auditing standards under our purview. I look forward to your comments about the scope and approach of our first foray into this area. Let us know if there is something that we appear not to have considered or where we may be going down the wrong path.
Again, I would like to thank our staff, as well as the staff of the SEC, for their thoughtful work and valuable insights.