Standard-Setting, Research, and Rulemaking Projects

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

ProjectDate of Proposal
Noncompliance with Laws and RegulationsJune 6, 2023
Firm and Engagement MetricsApril 9, 2024

Recently Completed Standard-Setting Projects

ProjectEffective DateDate of Board AdoptionDate of SEC Approval
Other AuditorsEffective for audits of fiscal years ending on or after December 15, 2024. June 21, 2022August 12, 2022
ConfirmationEffective for audits of fiscal years ending on or after June 15, 2025. September 28, 2023 December 1, 2023
Quality Control Subject to approval by the SEC, the final standard and related amendments to auditing standards, rules, and forms would take effect on December 15, 2025.

The first evaluation period will be for the period beginning on the effective date of the standard (i.e., December 15, 2025) and ending on September 30, 2026. The firm’s first evaluation must be reported to the PCAOB on Form QC no later than November 30, 2026.
May 13, 2024Pending
General Responsibilities of the Auditor in Conducting an Audit (AS 1000)Subject to approval by the SEC, the final standard and related amendments would take effect 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 would take effect as follows:
  • For public accounting firms that, during the calendar year ending December 31, 2024, issued audit reports with respect to more than 100 issuers, the 14-day documentation completion requirement will take effect for audits of financial statements for fiscal years beginning on or after December 15, 2024; and
  • For all other registered public accounting firms, the 14-day documentation completion requirement will take effect for audits of financial statements for fiscal years beginning on or after December 15, 2025.
May 13, 2024

Pending

Amendments Related to Aspects of Designing and Performing Audit Procedures That Involve Technology-Assisted Analysis of Information in Electronic Form Subject to final approval by the SEC, the final amendments will take effect for audits of financial statements for fiscal years beginning on or after December 15, 2025.  June 12, 2024Pending

Short-Term Standard-Setting Projects

ProjectProject DescriptionNext Board ActionAnticipated Timing
Noncompliance with Laws and RegulationsConsider 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.

Adoption

2024
Attestation Standards UpdateConsider the requirements in the interim attestation standards in connection with the PCAOB’s interim standards project. Proposal2025
Going ConcernConsider 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.Proposal2024
Firm and Engagement Metrics

Enhance information provided to investors, audit committees, and other stakeholders at both the firm and engagement level.

TBD pending analysis of comment letters on April 9th proposal 
Substantive Analytical ProceduresConsider 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.

TBD pending analysis of comment letters on June 12 proposal.

 

 
InventoryConsider updates to AS 2510, Auditing Inventories, in connection with the Interim Standards project to reflect changes in the auditing environment.Proposal2025
Other ReportingConsider updates to AS 3105, Departures from Unqualified Opinions, and other interim standards in the AS 3300 series.Proposal2024

Mid-Term Standard-Setting Projects

ProjectProject Description
FraudConsider 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 StandardsIn 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 AuditConsider 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.
Interim StandardsConsider 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: [email protected] 

ProjectProject 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.

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.

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

ProjectProject DescriptionDate of Board AdoptionDate of SEC Approval
Contributory Liability Consider changes to the Board’s ethics rule, PCAOB Rule 3502, Responsibility Not to Knowingly or Recklessly Contribute to Violations. June 12, 2024Pending

Recently Issued Rulemaking Proposals

ProjectDate of Proposal
RegistrationFebruary 27, 2024
Firm ReportingApril 9, 2024

Projects

ProjectProject DescriptionNext Board ActionAnticipated Timing
Firm Reporting Consider changes to audit firm reporting requirements including periodic reporting requirements, special reporting requirements, and other enhancements to the audit firm reporting framework.

TBD pending analysis of comment letters on April 9 proposal

 
Registration Consider changes to enhance the PCAOB’s registration program.TBD pending analysis of comment letters on February 27 proposal