The Public Company Accounting Oversight Board staff released a
The document suggests questions that may be of interest to audit committee members to consider among themselves or in discussions with their outside auditors, in light of current economic and geopolitical conditions. The questions include the following topics: risk of fraud; risk assessment and internal controls; auditing and accounting risks; digital assets; M&A activities; use of the work of other auditors; talent and its impact on audit quality; independence; critical audit matters and cybersecurity.
They may also want to consider other spotlights as reference points, the PCAOB noted, including one in April on
When it comes to deterring the risk of fraud, some of the questions in the new document include: "Did the auditor identify any new risks of fraud in the current year audit? If not, what procedures did the auditor perform to identify risks of fraud, and were any procedures different from the prior year? Did the auditor identify any significant unusual transactions? If yes, how did the auditor evaluate whether the transaction was for a legitimate business purpose?"
In terms of cybersecurity, possible questions include: "How did the auditor consider the risk of cyberthreats or cyber incidents? Did the auditor identify a risk of material misstatement related to cybersecurity? Was the auditor made aware of cyber breaches within the public company's operations that may affect financial reporting? How did the auditor's identification and assessment of possible risks of material misstatement consider changes to the cyberthreat landscape?"
