I support this proposal, which includes a new standard, AS 1000, that brings together and modernizes our foundational standards which address the general responsibilities of the auditor, including due professional care and professional skepticism. The proposal also includes amendments to other standards, which clarify the due care responsibilities of the engagement partner and reduces the period for archiving audit documentation. Together the proposed AS 1000 and related amendments reaffirm the core principles and responsibilities of auditors, yet also reflect changes in the auditing environment.
The auditor’s role in the effective functioning of the capital markets cannot be underestimated. AS 1000 streamlines the key principles and responsibilities including due professional care, professional skepticism, independence, ethics, and competence that build strength and trust in our capital markets. When these attributes are absent from an audit, it elevates the risk of investor harm.
AS 1000 and related amendments further clarify the engagement partner’s due care responsibilities to align with existing supervision and review requirements. The auditing profession relies on an apprenticeship model, it is therefore imperative that engagement partners perform their due care responsibilities to ensure that the professional judgment exercised, and audit conclusions reached during an audit are properly supported. This is particularly heightened in a hybrid working environment.
The amendments also shorten the archive period permitting our inspectors to begin high-risk inspections earlier, which allows for earlier completion of inspection reports and facilitates spotlight documents and other staff guidance thereby enhancing transparency.
Auditors that embody the foundational responsibilities and principles of the proposed AS 1000 and related amendments will drive consistently higher audit quality, resulting in greater investor protection and enhanced trust in our markets.
I support issuing this proposal for comment and look forward to learning the views of our stakeholders. It is particularly important that commenters provide any insights they may have on the practical application of this proposal and on whether there are other amendments that should be considered.
I would like to thank the many individuals involved in this proposal, including from the Office of the Chief Auditor Barb Vanich, Jessica Watts, Dominika Taraszkiewicz, Ekaterina Dizna, Akiko Upchurch, and Hunter Jones. From the Office of Economic and Risk Analysis, Mike Gurbutt, John Cook, and Dylan Rassier. From the Office of General Counsel, Connor Raso, Vince Meehan, and Katie Reilly. I would also like to thank my fellow Board members and my staff for their efforts towards this standard-setting project.