On May 13, PCAOB adopted new auditor responsibilities standard.
PCAOB reported adoption of new auditing standard, AS 1000, General responsibilities of the auditor in conducting an audit, and amended other related PCAOB standards.
Follows proposed AS 1000 standards to consolidate 2003 interim standards, #167746.
Also adopted QC 1000, Firm's system of quality control, EI 1000, integrity, #154206.
Chair Williams, board members Ho and Botic issued statements in support of adoption.
Background
AS 1000 enhanced and consolidated a group of standards that were adopted on an interim basis by the PCAOB in Apr. 2003 and that addressed audit responsibilities.
Due professional care, professional skepticism, competence, professional judgment.
Adoption of new standard informed by input from notice-and-comment process.
Standard and related amendments were clarified as a result of comments received.
Modernized, clarified, streamlined general principles and responsibilities of auditors.
Did not create any new principles/responsibilities; clarified those that already exist.
Specified that the auditor’s responsibility to investors transcends the auditor’s relationship with management and audit committee of the company under audit.
This responsibility provides the foundation for an objective and independent audit, while making clear the standard does not create any new legal obligation for auditors.
Clarified auditor’s responsibility to evaluate if financial statements are presented fairly.
Further, clarified the engagement partner’s due professional care responsibilities by adding specificity to certain audit performance principles set out in the standards.
Accelerated documentation completion date by reducing the max period for the auditor to assemble a complete and final set of audit documentation from 45 days to 14 days.
Additionally, in response to comments, clarified an auditor’s professional skepticism extends to other information obtained to comply with PCAOB standards and rules.
Effectiveness
Subject to approval by SEC, the new standard and related amendments will take effect for audits of financial statements for fiscal years beginning on or after Dec. 15, 2024.
For certain firms, amendment relating to documentation completion date takes effect for audits of financial statements for fiscal years beginning on/after Dec. 15, 2025.
May 24, 2024 PCAOB Filing
On May 24, 2024, PCAOB submitted proposal to SEC for approval, 21-day comment.
Jun. 5, 2024 SEC Proposal
On Jun. 5, 2024, SEC issued notice of filing of proposal for a 21-day comment period.
Jun. 11, 2024 Fed Reg Proposal
On Jun. 11, 2024, SEC published proposal in federal register, comments Jul. 2, 2024.
Jul. 1, 2024 SEC Comment Extension
On Jul. 1, 2024, SEC issued notice extending comment period until Jul. 16, 2024.
Jul. 8, 2024 SEC Fed Reg Comment Extension
On Jul. 8, 2024, SEC published comment period extension in federal register, Jul. 16.
SEC shall either approve or disapprove, or institute proceedings by Aug. 25, 2024.
Aug. 2024 SEC Approval
On Aug. 20, 2024, SEC approvedAuditing standard 1000, amendments to standards.
In addition, SEC believed that there is sufficient basis to determine that applying the amendments to audits of emerging growth companies (EGCs) is necessary/appropriate
Received 11 comment letters in response to notice of filing, were generally supportive.
SEC Chair Gensler issued opening statement re proposals; PCAOB Williams statement.
Effective for audits of financial statements for fiscal years on or after Dec. 15, 2024.
Noted exception for registered public accounting firms that provide audit opinions for 100 or fewer issuers during the calendar year ending on December 31, 2024.
The amendment relating to the documentation completion date will take effect for audits of financial statements for fiscal years beginning on or after Dec. 15, 2025.
Aug. 20, 2024 PCAOB Marked Text
On Aug. 20, 2024, PCAOB provided marked text of amendments re audit responsibility.
Comparison document to be a reference, showing changes from existing standards.
Aug. 23, 2024 Fed Reg Approval
On Aug. 23, 2024, SEC published auditing standards amendments in federal register.
