Thank you, Chairman Doty. I support the adoption of the framework for the reorganization of the PCAOB auditing standards that we are considering this morning.
As I said in my earlier statement related to this matter, I view the reorganization of our standards as a key step in highlighting the Board's responsibility to set auditing standards, which auditors of public companies must follow. The framework that is being adopted today is logical in that it 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 Since then, the Board has undertaken a review of those standards and adopted 18 new auditing standards that either superseded or amended portions of various existing standards. Therefore, prior this reorganization, auditors had to navigate through the Board's new standards as well as the remaining interim standards that the Board has not superseded.
The framework before us reorganizes the Board's auditing standards by integrating the Board's new standards and the remaining interim standards. The framework uses a numbering scheme that should assist auditors in easily identifying which set of standards apply to the audits of issuers.
Under this framework, individual standards are grouped into topical categories, starting with standards that deal with broad auditing principles, concepts, activities and communications. That group is followed by standards that deal with planning and performing the audit, and then by the standards that deal with the auditor's report. Matters relating specifically to filings under the Federal securities laws and other matters are grouped in two separate topical groups.
Auditing interpretations, including appendices to the interim standards, will also now be presented together separately from the standards on the PCAOB's website.
The framework being adopted today presents several benefits, including allowing the user of our standards to navigate the standards more easily. Going forward, auditors will no longer need to steer between the standards the Board has adopted and the remaining interim standards not yet superseded. Further, future auditing standards adopted by the Board will be issued as new or replacement sections and paragraphs within the structure, making the integration of any new standards more efficient and effective.
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 would note that commenters generally supported the Board reorganizing its standards and I am pleased that the project to reorganize our standards is complete.
I look forward to finalizing a number of the other standards that are on the standard-setting agenda posted on the Board's website.
In closing, I would like to join you, Mr. Chairman, and others in thanking Marty Baumann, Keith Wilson, Greg Fletcher, Robert Ravas, Hunter Jones, and the staff of the other offices and divisions for their efforts in developing the framework before us today. I would also like to thank the staff of the SEC for their input on this framework.