Post-Implementation Review

The PCAOB is committed to robust economic analysis, including post-implementation reviews that leverage data from our oversight activities. The PCAOB has established a program under which the staff of the Office of Economic and Risk Analysis conducts post-implementation reviews of PCAOB rules and standards.

Completed Reviews

Future Reviews

  • AS 3101, The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion

About the Program

Post-implementation review is an important component of high-quality economic analysis of regulatory decision-making. Post-implementation reviews complement the prospective economic analysis that the PCAOB conducts as part of a rulemaking. Reviews allow for a second look, with the benefit of more data, on the overall effects of a rule or standard and provide an additional opportunity for external engagement. Over time, it is anticipated that post-implementation reviews will provide the PCAOB with useful information for improving prospective economic analyses and informing regulatory decisions.

The objective of the PCAOB's post-implementation review program is to evaluate the overall effect of a rule or standard, after a reasonable period of time has passed since its effective date. This includes:

  • Evaluating whether a rule or standard is accomplishing its intended purpose, as identified in the rulemaking release.
  • Identifying, wherever possible, costs and benefits.
  • Identifying unintended consequences.

Reporting on Post-Implementation Reviews

The PCAOB is committed to transparency including around the impact of our rules and standards. Upon completion of each post-implementation review, we will report our conclusions to the public. Each post-implementation review report will also be accompanied by a separate staff white paper to provide additional transparency into the data sets used, methods applied, and results of the analysis.

Post-implementation review is an important component of high-quality economic analysis of regulatory decision-making. The PCAOB has established a program under which the staff of the Office of Economic and Risk Analysis conducts post-implementation reviews of PCAOB rules and standards.

The objective of the post-implementation review program is to look back at significant rulemakings, after a reasonable period of time has passed, to evaluate the overall effect of the rule or standard. This includes:

  • Evaluating whether a rule or standard is accomplishing its intended purpose, as identified in the rulemaking release;
  • Identifying, wherever possible, costs and benefits; and
  • Identifying unanticipated consequences, either positive or negative.
In connection with this evaluation, the staff will also use the post-implementation review process to gather perspectives on whether rules and standards can be refined or improved.

Post-implementation reviews are intended to complement the prospective economic analysis that PCAOB staff conducts as part of a rulemaking. Over time, it is anticipated that post-implementation reviews will provide useful information for improving prospective economic analyses and informing regulatory decisions. For these reasons, various government agencies, regulators and standard-setters have taken steps to implement retrospective review programs. The PCAOB has considered these initiatives in the development of its own program.

Although post-implementation reviews offer the potential to provide useful information that can serve to enhance the PCAOB's policymaking process, it is also important to recognize challenges and limitations of such reviews. These include isolating the incremental effects of a new standard or rule, dealing with variation across firms and over time, and quantifying effects (especially benefits and indirect costs). Also, because the effects of some PCAOB standards may not be directly observable by some stakeholders, their ability to provide complete information in connection with a review may be limited.

A number of factors are likely to be relevant in deciding whether to perform a post-implementation review of a particular rule or standard and in prioritizing and scoping the work. The staff consults with staff in other offices and divisions and the Board to identify rules or standards that represent candidates for review. In general, the staff expects to perform post-implementation reviews of rules and standards only after a reasonable implementation period has passed so that auditors and other affected parties can adapt, costs and benefits can normalize, and the staff can gather sufficient data to conduct a thorough review regarding the actual effects of the rule or standard.

To perform the reviews, the staff will gather and analyze data from a number of sources, including data collected through the PCAOB's oversight activities. The PCAOB regularly issues Board general reports summarizing information regarding firms' implementation of, and compliance with, new auditing standards. The reports are based on inspection observations from inspection years immediately subsequent to the adoption of the new standard. Post-implementation reviews complement these reports by providing an opportunity to gather additional information from a variety of sources, including firms, preparers, audit committees, investors and others, and to more broadly evaluate the overall effect of a rule or standard, including through economic and statistical analysis of internal and external data relating to periods both before and after adoption.

Although the approach to each post-implementation review will depend upon a number of variables including, for example, the nature of the rule or standard being reviewed and the availability of relevant data, the staff may, among other things:

  • Review project archives;
  • Seek comment from interested members of the public;
  • Solicit input through surveys, questionnaires and interviews;
  • Review relevant academic and other research;
  • Conduct analysis of data, including publicly available data and, in particular, data collected through the PCAOB's oversight activities; and
  • Convene focus group meetings and engage the PCAOB's Standing Advisory Group.

The review process may evolve as the staff gain experiences conducting these types of reviews.

Upon completion of each review, the staff will report its observations to the Board and the public.