Washington, D.C. - The Public Company Accounting Oversight Board has issued a concept release that aims to overhaul the auditor's reporting model, describing different alternatives to provide more information to investors from the auditors of publicly traded companies.
Among the alternatives are the inclusion of an auditor's discussion and analysis section with an audit report, and audit assurance on information outside the financial statements, such as non-GAAP information on earnings releases. The changes would go well beyond the traditional pass/fail model.
The board plans to convene a public roundtable to discuss the concept release in the third quarter of 2011.
The concept release presents several alternatives for changing the auditor's reporting model and is seeking specific comment on these or other alternatives that could provide investors with more transparency in the audit process and more insight into financial statements or other information. These include:
An auditor's discussion and analysis;
Required and expanded use of emphasis paragraphs;
Auditor assurance on other information outside the financial statements; and,
Clarification of language in the standard auditor's report.
The current release seeks public comment on alternatives for amendments to, or the development of new, auditing standards that would supersede the board's current standards on the auditors' report. The PCAOB also released a fact sheet that provides a summary of the matters included in the concept release.
Earlier this year, PCAOB staff reached out to investors, auditors, statement preparers, audit committee members, and others to seek their views on potential changes to the auditor's report.
The staff reported its findings to the board on March 22. Comments on the concept release are due Sept. 30, 2011.
Additional details about the roundtable discussion on the auditor's reporting model concept release will be announced at a later date.
