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Standard-Setting and Research Projects
The PCAOB seeks to establish and maintain high-quality auditing and related professional practice standards for audits of public companies, as well as of registered broker-dealers, in support of the PCAOB’s mission to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The PCAOB’s Office of the Chief Auditor, in collaboration with other PCAOB offices and divisions, assists the Board in establishing and maintaining PCAOB standards.
As part of establishing and maintaining PCAOB standards, the PCAOB considers current and emerging audit issues and determines the need for engaging in standard-setting or conducting research on standards related issues. The projects are informed by a range of activities, such as the PCAOB's oversight; engagement with investors and other stakeholders, including through the PCAOB’s advisory groups; discussion with U.S. Securities and Exchange Commission staff; activities of other regulators and standard setters; and other relevant inputs and developments.
The standard-setting agenda is primarily focused on enhancing investor protection by prioritizing the areas where improvements to PCAOB standards could have the most significant impact on audit quality and the public interest.
The standard-setting projects are divided into short-term and mid-term categories and are presented in no particular order within such categories. Short-term standard-setting projects are those that are being actively developed by the staff and where a Board action (e.g., proposal or adoption) is anticipated in fewer than 12 months. Mid-term standard-setting projects are projects where the staff is actively engaged but Board action is not anticipated in the next 12 months. As mid-term projects progress, they will be moved onto the short-term projects list.
This standard-setting agenda is intended to be dynamic. Consequently, there may be updates to the substance or anticipated timing of the projects as we gain more insight based on our oversight activities or as circumstances change. The Office of the Chief Auditor will update the agenda as needed but at a minimum semi-annually to reflect changes driven by the types of factors discussed above, as well as any updates to the agenda based on completion of projects and additions of other projects.
Recently Issued Standard-Setting Proposals
| Project | Date of Proposal |
|---|---|
| Noncompliance with Laws and Regulations | June 6, 2023 |
| Substantive Analytics Procedures | June 12, 2024 |
Recently Completed Standard-Setting Projects
| Project | Effective Date | Date of Board Adoption | Date of SEC Approval |
|---|---|---|---|
| Other Auditors | Effective for audits of fiscal years ending on or after December 15, 2024. | June 21, 2022 | August 12, 2022 |
| Confirmation | Effective for audits of fiscal years ending on or after June 15, 2025. | September 28, 2023 | December 1, 2023 |
| Quality Control | Effective on December 15, 2025. | May 13, 2024 | September 9, 2024 |
| General Responsibilities of the Auditor in Conducting an Audit (AS 1000) | Effective for audits of fiscal years beginning on or after, December 15, 2024, except for the 14-day documentation completion date. The 14-day documentation completion date is effective as follows:
| May 13, 2024 | August 20, 2024 |
| Amendments Related to Aspects of Designing and Performing Audit Procedures that Involve Technology-Assisted Analysis of Information in Electronic Form | Effective for audits of financial statements for fiscal years beginning on or after December 15, 2025. | June 12, 2024 | August 20, 2024 |
| Firm and Engagement Metrics | Subject to approval by the SEC, the final rules and reporting forms would take effect on October 1, 2027 with a phased implementation period as follows: Firm-level metrics reporting:
Engagement-level metrics reporting 35 days after issuance of the auditor’s report:
| November 21, 2024 | Withdrawn |
Short-Term Standard-Setting Projects
| Project | Project Description | Next Board Action | Anticipated Timing |
|---|---|---|---|
| Noncompliance with Laws and Regulations | Consider changes to an auditor’s consideration of possible noncompliance with laws and regulations including how AS 2405, Illegal Acts by Clients, should be revised to integrate a scalable, risk-based approach that takes into account recent developments in corporate governance and internal control practices. | TBD pending analysis of comment letters on June 6, 2023 proposal and March 6, 2024 Roundtable, and responses to targeted inquiries of firms about their approach relating to noncompliance with laws and regulations or illegal acts | 2025 |
| Attestation Standards Update | Consider the requirements in the interim attestation standards in connection with the PCAOB’s interim standards project. | Proposal | 2025 |
| Going Concern | Consider the auditor’s evaluation and reporting of a company’s ability to continue as a going concern in response to changes in financial reporting, the auditing environment, and stakeholder needs, including by considering how AS 2415, Consideration of an Entity's Ability to Continue as a Going Concern, should be revised. | Proposal | 2025 |
| Substantive Analytical Procedures | Consider changes to an auditor’s use of substantive analytical procedures to better align with the auditor’s risk assessment and to address the increasing use of technology tools in performing these procedures, including whether to revise AS 2305, Substantive Analytical Procedures. | Adoption
| 2025 |
| Inventory | Consider updates to AS 2510, Auditing Inventories, in connection with the Interim Standards project to reflect changes in the auditing environment. | Proposal | 2025 |
Auditor Reporting in Specified Circumstances | Consider updates to AS 3105, Departures from Unqualified Opinions and Other Reporting Circumstances, and other interim standards in the AS 3300 series. | Proposal | 2024 |
Mid-Term Standard-Setting Projects
| Project | Project Description |
|---|---|
| Fraud | Consider how AS 2401, Consideration of Fraud in a Financial Statement Audit, should be revised to better align an auditor’s responsibilities for addressing intentional acts that result in material misstatements in financial statements with the auditor’s risk assessment, including addressing matters that may arise from developments in the use of technology. |
| Interim Ethics and Independence Standards | In connection with the PCAOB’s interim standards project, consider whether PCAOB registered firms and their associated persons existing obligations should be enhanced and updated to better promote compliance through improved ethical behavior and independence. |
| Use of a Service Organization | Consider how AS 2601, Consideration of an Entity’s Use of a Service Organization, should be amended to reflect changes in how companies use services of third parties that are relevant to the company’s own internal controls over financial reporting and developments in practice. |
| Interim Financial Information Reviews | Consider updates to AS 4105, Reviews of Interim Financial Information, in connection with the Interim Standards project to reflect changes in the auditing and reporting environment. |
| Internal Audit | Consider updates to AS 2605, Consideration of the Internal Audit Function, in connection with the Interim Standards project to reflect changes in the auditing and reporting environment. |
Subsequent Events and Other Matters Arising After the Date of the Auditors Report | Consider updates to interim standards that address auditor responsibilities related to (i) certain events occurring between the balance sheet and the auditor’s report date and (ii) certain matters arising after the auditor’s report date, such as subsequently discovered facts and reissuance of the auditor’s report. This project considers updating AS 2801, Subsequent Events, AS 2905, Subsequent Discovery of Facts Existing at the Date of the Auditor’s Report, and certain other interim standards. |
| Interim Standards | Consider whether the remaining “interim” standards, as adopted upon the establishment of the Board, should be amended, replaced, or eliminated, as appropriate. As part of this analysis, evaluate which standards are necessary to retain, and of those, which should be retained with minimal updates and which require more significant changes. Separate projects, including requests for comment on potential standards to eliminate, will be added to the standard-setting agenda as the staff completes its analysis. |
Research Projects
Research projects focus on whether there is a need for changes to PCAOB standards or other regulatory responses. If standard setting is deemed appropriate, the project will be added to the standard-setting agenda.
If standard setting is not pursued, consideration will be given to whether any other action is needed. For example, the staff may prepare guidance regarding the application of existing PCAOB standards.
If research on a project continues for more than 12 months, a project update will be provided. To help expedite the research phase, the staff welcomes stakeholders to share with the PCAOB analyses and data related to these research topics. Please
provide this information to the following email address: researchinfo@pcaobus.org.
| Project | Project Description |
|---|---|
| Data and Technology | Assess whether there is a need for guidance, changes to PCAOB standards, or other regulatory actions in light of the increased use of technology-based tools by auditors and preparers. This includes evaluating the role technology innovation plays in driving audit quality. Research from this project may give rise to individual standard-setting projects, such as the project on amendments related to technology-assisted analysis of information in electronic form, and may also inform the scope or nature of other projects that are included on the standard-setting agenda. Please see project page for additional background and project activity. |
| Communication of Critical Audit Matters | The project seeks to understand why there continues to be a decrease in the average number of critical audit matters (CAM) reported in the auditor’s report over time and whether there is a need for guidance, changes to PCAOB standards, or other regulatory action to improve such reporting, including the information that is provided as part of the CAM reporting. The staff continues to conduct research, including taking into account recent insights shared by the Investor Advisory Group(PDF). |
Rulemaking Projects
In addition to standard-setting and research projects, the Board is considering the following rulemaking projects focused on enhancing investor transparency and enforcement of PCAOB rules.
As with standard-setting projects, proposed changes to PCAOB rules from these rulemaking projects will go through a public notice-and-comment process to gather input from investors and other stakeholders.
Recently Completed Rulemaking Projects
| Project | Effective Date | Date of Board Adoption | Date of SEC Approval |
|---|---|---|---|
| Contributory Liability | Effective as of October 19, 2024. | June 12, 2024 | August 20, 2024 |
| Registration (Constructive Requests to Withdraw from Registration) | Effective initially for annual reports and annual fees that are due in 2025. | November 14, 2024 | January 2, 2025 |
| Firm Reporting | Subject to approval by the SEC, effective in phases: Phase 1: For larger firms (as defined in PCAOB Rule 4013), effective as of March 31, 2027, or two years after approval of the requirements by the SEC, whichever occurs later. Phase 2: For other firms subject to reporting requirements, effective one year after Phase 1 (i.e., March 31, 2028, or three years after the approval of the requirements by the SEC, whichever occurs later). Form QC: Effective December 15, 2025, to be submitted no later than 30 days after December 15, 2025 (January 14, 2026). | November 21, 2024 | Withdrawn |
Recently Issued Rulemaking Proposals
| Project | Date of Proposal |
|---|---|
| Registration
| February 27, 2024 |
Projects
| Project | Project Description | Next Board Action | Anticipated Timing |
|---|---|---|---|
Registration | False or misleading statements concerning PCAOB registration and oversight. | TBD pending analysis of comment letters on February 27 proposal |