An Improved QC 1000

Remarks as prepared for delivery 

Thank you, Mr. Chairman.

When I joined the Board earlier this year, I wanted to see the PCAOB pursue a moderate approach to standard setting that would deliver durable results.  I believe that today’s amendments to QC 1000 deliver the results we need.  In general, the amendments reduce complexity and cost, especially for smaller firms, without reducing audit quality. They also align QC 1000 more closely to international standards.  These amendments will not only improve systems of quality control but also encourage more firms to remain registered and others to pursue public company engagements.  These amendments will reduce burdens that could cause smaller firms to curtail the number of public company engagements they perform each year.

Today’s amendments reflect a PCAOB that listens to its stakeholders and is committed to continuous improvement. After the PCAOB postponed the effective date of QC 1000 in August 2025, the SEC received comment letters raising concerns that QC 1000 was too prescriptive, operationally complex, and costly.  The PCAOB received more letters in response to our March 2026 request for public comments on our strategic priorities and our June request for comments on potential amendments to QC 1000.  These comments helped the Board correct the direction of our quality control standards before QC 1000 takes effect on December 15, 2026.  Listening to our stakeholders has made this standard better.

I see this commitment to listening and continuous improvement everywhere at the PCAOB.  Our Chairman is leading work to modernize our inspection program, in consultation with investors, audit practitioners, and other stakeholders.  We expect to make significant investments in technology and staff training, particularly relating to artificial intelligence.  We also are finalizing our work on proposed standards for audits of broker-dealers which will be published for public comment, possibly later this year.  Our commitment to continuous improvement includes working more closely with the SEC, so that our respective resources are leveraged more efficiently with the end goal being more effective investor protection.  And finally, this commitment to continuous improvement extends not only to large scale improvements but also smaller scale improvements as evidenced in the QC 1000 adopting release where the PCAOB identifies commenters by name – something that is long overdue. 

In sum, I believe that the QC 1000 amendments correct the course of our quality control standards and demonstrate a broader commitment to how this Board will carry out the PCAOB’s mission – by listening, modernizing, and pursuing a moderate and sustainable path.  Today completes an important chapter for QC 1000, but it is only one chapter.  There may be more chapters to come based on what this Board learns from the implementation of QC 1000.  The PCAOB conducts post implementation reviews of its standards, and we might learn from such a review that tweaks or changes to QC 1000 may be appropriate.  Future changes to QC 1000 may not be necessary but recognizing this possibility is indicative of this Board’s nimbleness and commitment to continuous improvement.

I want to thank staff in the Office of the Chief Auditor, the Office of Economic and Risk Analysis, and the Office of the General Counsel for their hard work on the amendments to QC 1000.  Their commitment to listening and continuous improvement have made this standard better.  I also want to thank my fellow Board Members and their staff.

Back to you, Mr. Chairman.