The Public Company Accounting Oversight Board announced today that it is postponing the effective date for QC 1000, A Firm's System of Quality Control, by one year to Dec. 15, 2026.
The decision also postpones the other new and amended standards, rules and forms adopted by the PCAOB on May 13, 2024, as well as the related rescission date of certain rules and standards that are currently in force.
The decision to postpone the effective date came from various sources reporting that some firms have encountered challenges when implementing QC 1000-compliant quality control systems that, "as a practical matter, may be insurmountable within the previously established timeframe," according to a news release from the board. The PCAOB believes that an additional year is sufficient time for firms to overcome those challenges.
"While I understand that some firms expect to be ready to implement the requirements of QC 1000 later this year, I take seriously that other firms have encountered implementation challenges that may, as a practical matter, be insurmountable within the established time frame," said PCAOB acting chair George Botic in a statement. "Today's decision by the board provides adequate additional time to comply. I also want to highlight that, for any firm that is prepared to do so, there remains no obstacle to voluntarily aligning the firm's quality control system with the requirements of QC 1000 before the effective date. In my view, investors will benefit to the extent that firms do so."
The board has not made or proposed any changes to the new and amended standards, rules or forms. There is also no change to the board's previous statement that registered firms are permitted to elect to comply with QC 1000 before the effective date (except as to reporting on the evaluation of the quality control system).
The standards, rules and forms affected by the change to the effective date:
- New quality control standard QC 1000, A Firm's System of Quality Control;
- New PCAOB Rule 3400, Quality Control Standards;
- New PCAOB Rule 2203A, Report on the Evaluation of the Firm's System of Quality Control, and new PCAOB Form QC;
- Amended and retitled AS 2901, Responding to Engagement Deficiencies After Issuance of the Auditor's Report (formerly Consideration of Omitted Procedures After the Report Date);
- New ethics standard EI 1000, Integrity and Objectivity;
- New AS 1310, Notification of Termination of the Auditor-Issuer Relationship (recodifying SEC Practice Section ("SECPS") § 1000.08(m) and applying the requirements to all registered public accounting firms and all issuer engagements); and,
- Amendments to AS 1215, Audit Documentation; AS 1220, Engagement Quality Review; AS 2101, Audit Planning; AS 2110, Identifying and Assessing Risks of Material Misstatement; AS 2201, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements; AS 2315, Audit Sampling; AS 4105, Reviews of Interim Financial Information; Attestation Standard No. 1, Examination Engagements Regarding Compliance Reports of Brokers and Dealers; Attestation Standard No. 2, Review Engagements Regarding Exemption Reports of Brokers and Dealers; AT Section 101, Attest Engagements; ET Section 101, Independence; ET Section 191, Ethics Rulings on Independence, Integrity, and Objectivity; PCAOB Rule 2204, Signatures; PCAOB Rule 2205, Amendments; PCAOB Rule 2206, Date of Filing; PCAOB Rule 3500T, Interim Ethics and Independence Standards; Form 1, Application for Registration; Form 2, Annual Report Form; and Instructions to Form AP, Auditor Reporting of Certain Audit Participants.
The PCAOB's action delays the effective date of the rescission of (i) PCAOB Rule 3400T, Interim Quality Control Standards; (ii) ET Section 102, Integrity and Objectivity; and (iii) AS 1110, Relationship of Auditing Standards to Quality Control Standards, to Dec. 15, 2026.
Until Rule 3400T is rescinded on December 15, 2026, the following interim quality control standards will remain in effect:
- QC Section 20, System of Quality Control for a CPA Firm's Accounting and Auditing Practice;
- QC Section 30, Monitoring a CPA Firm's Accounting and Auditing Practice;
- QC Section 40, The Personnel Management Element of a Firm's System of Quality Control-Competencies Required by a Practitioner-in-Charge of an Attest Engagement;
- SECPS § 1000.08(d), Continuing Professional Education of Audit Firm Personnel;
- SECPS § 1000.08(l), Communication by Written Statement to all Professional Personnel of Firm Policies and Procedures on the Recommendation and Approval of Accounting Principles, Present and Potential Client Relationships, and the Types of Services Provided;
- SECPS § 1000.08(m), Notification of the Commission of Resignations and Dismissals from Audit Engagements for Commission Registrants;
- SECPS § 1000.08(n), Audit Firm Obligations with Respect to the Policies and Procedures of Correspondent Firms and of Other Members of International Firms or International Associations of Firms;
- SECPS § 1000.08(o), Policies and Procedures to Comply with Independence Requirements;
- SECPS § 1000.38, Appendix D—Revised Definition of an SEC Client;
- SECPS § 1000.42, Appendix H—Illustrative Statement of Firm Philosophy;
- SECPS § 1000.43, Appendix I—Standard Form of Letter Confirming the Cessation of the Client-Auditor Relationship;
- SECPS § 1000.45, Appendix K—SECPS Member Firms With Foreign Associated Firms That Audit SEC Registrants; and,
- SECPS § 1000.46, Appendix L—Independence Quality Controls.
