Information for Audit Committees

Audit committees play a vital role in the capital markets' investor protection framework through their oversight of the audit engagement and their company's financial reporting process.

"Investors have come to appreciate how important audit committees are in overseeing the audit."
James R. Doty, PCAOB Chairman

As part of its mission to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports, the PCAOB is committed to constructive engagement and information sharing with audit committees in areas of common interest, including auditor independence and audit quality.

Board Reports and Staff Briefs on PCAOB Inspections

PCAOB Issues Staff Inspection Brief Detailing Scope and Objectives of 2016 Inspections of Auditors of Public Companies (July 2016) -- This staff inspection brief notes, among other things, that the PCAOB continues to focus on public company audit areas where inspectors have found frequent and recurring deficiencies.

PCAOB Issues Report Describing Inspection Observations Related to Audit Firms' Communications with Audit Committees (April 2016) -- In this Board general report, inspection findings included that most firms inspected in 2014 had incorporated the requirements of the PCAOB auditing standard on Communications with Audit Committees

PCAOB Releases Staff Inspection Brief Previewing 2015 Inspection Findings (April 2016) -- In preliminary 2015 inspection results outlined in this staff inspection brief, the most frequent audit deficiencies continued to be in three key areas: auditing internal control over financial reporting; assessing and responding to risks of material misstatement; and auditing accounting estimates, including fair value measurements.

View more information about PCAOB inspections.

Approved Board Rules Soon to Become Effective

Identifying Participants in the Audit

Beginning in early 2017, audit committees and others will have access to more information about the auditors of public companies. A PCAOB database will make available the name and location of the engagement partner, as well as the names of other audit firms that participated in an audit, domestically and internationally. New PCAOB rules to improve transparency require firms to make these disclosures through a new form, Form AP

“The PCAOB has learned valuable insights from discussions with audit committee members."
Jay D. Hanson, Board member

Reorganized Standards 

The Board adopted amendments to its rules and standards that will become effective as of December 31, 2016. The PCAOB reorganized the standards into a topical system. View the reorganized standards.

Audit Quality Indicators Project

PCAOB Podcast on Audit Quality Indicators

Audit quality indicators are a potential portfolio of quantitative measures that may provide new insights into how high quality audits are achieved. Taken together with qualitative context, the indicators may inform discussions among those who are concerned with the financial reporting and auditing process, such as audit committees and audit firms. Enhanced discussions, in turn, may strengthen audit planning, execution, and communication.

Read more about the Audit Quality Indicators project.

Audit Committee Dialogue

The PCAOB published a digital outreach communication to audit committees called Audit Committee Dialogue. This Dialogue,issued in 2015, highlighted insights from PCAOB inspections and discussed recurring areas of concern and emerging risks related to increases in mergers and acquisitions, falling oil prices, undistributed foreign earnings, and maintaining audit quality while growing other business. The Dialogue also offered potential questions for audit committee members to ask their auditors.

Recent Standard-Setting Projects

Proposal on the Lead Auditor's Supervision of Other Auditors

The proposal is intended to strengthen existing requirements and impose a more uniform approach to a lead auditor's supervision of other auditors.

Changes Proposed for Auditor's Report

Why change the auditor's report? The PCAOB proposed to enhance the report to make it more informative to investors by requiring auditors to provide information on critical audit matters. 

See more current and recent standard-setting activities.