Thank you, Chairman Doty. I support the proposed framework for the reorganization of the PCAOB auditing standards that we are considering this morning.
The Sarbanes-Oxley Act of 2002 gave the Board rulemaking authority over the standards applicable to the audits of issuers. I view this proposal as a key step in highlighting that responsibility in that the Board is proposing to organize its standards, which auditors of public companies must follow, in a logical framework that follows the flow of the audit process.
In April 2003, the Board adopted, on an interim basis, the generally accepted auditing standards of the Auditing Standards Board of the American Institute of Certified Public Accountants that were in existence at that time. Since then, the Board has undertaken a review of those standards and adopted 16 new auditing standards that either superseded or amended portions of various existing standards. Therefore, today auditors must navigate through the Board's new standards as well as the remaining interim standards that the Board has not superseded.
The proposed framework for reorganizing the Board's auditing standards would integrate the Board's new standards and those remaining interim standards. In addition, the proposed framework will use a different numbering scheme that will assist auditors in easily identifying which set of standards apply to the audits of issuers.
As others have mentioned, the proposed reorganization of the Board's auditing standards presents several benefits, including enhancing the usability of the Board's auditing standards and allowing users to navigate the standards more easily.
Other important standard-setting projects that the Board is considering include, but are not limited to, the updating of the auditor's report and revising standards involving related-party transactions and significant unusual transactions, as well as those related to going concern, the role of the specialist, and fair value. I look forward to moving ahead on these standard setting projects, all of which are of particular importance to enhancing investor protection and improving audit quality.
I believe that the proposed framework we are considering today will result in minimal one-time costs for firms while providing long-term benefits in terms of the streamlining that will occur. I also look forward to reviewing the comments on this proposal.
In closing, I would like to join you, Mr. Chairman, and others in thanking Marty Baumann and his staff, Keith Wilson, Kimberly Kolar, and Robert Ravas, and Jake Lesser from the General Counsel's Office for their efforts in developing the proposed framework before us today. I would also like to thank the staff of the SEC for their input on this proposed framework.