The Public Company Accounting Oversight Board has scheduled a meeting for next Tuesday to consider proposing for public comment a new auditing standard and related amendments to enhance the auditor’s reporting model.
In addition, the PCAOB plans to consider proposing a new auditing standard and related amendments to enhance the auditor’s responsibilities (including reporting responsibilities) for other information in an annual report that contains audited financial statements and the auditor’s report.
The auditor's report is the main way an auditor communicates to investors and other financial statement users about the audit of the financial statements, but the format has changed little since the 1940s. Since that time, the size and complexity of U.S. capital markets has greatly increased, the PCAOB noted, and a greater percentage of American households invest their savings in the stock market than ever before.
The proposal aims to enhance the usefulness of the auditor’s communication to those relying on the audit report. The PCAOB noted that it has conducted extensive outreach efforts over the last three years to investors, auditors, preparers of financial statements, audit committee members and other interested parties about changing the auditor’s reporting model. Many audit report users have told the board they want more insightful information about the results of the audit.
In June 2011, the PCAOB issued a related concept release to seek public comment on potential changes to the auditor's reporting model. In September 2011, the PCAOB also held a public roundtable to get further insight on the alternatives presented in the concept release.
The meeting to consider proposing the two auditing standards and related amendments will open to the public and will take place in the PCAOB’s meeting room at 1666 K St. NW, Washington, DC.
A webcast via a link on the PCAOB Web site will be made available the day of the meeting. The meeting also will be available via podcast later in the day.
Earlier this month, an international standard-setting body that often works with the PCAOB, the International Auditing and Assurance Standards Board, issued its own exposure draft proposing changes in the structure of the future auditor’s report (see IAASB Proposes Fundamental Overhaul of Audit Reports).