The Public Company Accounting Oversight Board has proposed an auditing standard on engagement quality review and a conforming amendment to the board's interim quality control standards that will supersede the board's interim concurring partner review requirement.
Section 103 of the Sarbanes-Oxley Act directs the board to include in its auditing standards a requirement for each registered public accounting firm to provide a concurring or second partner review and approval of each audit report, along with other related information and a concurring approval.
The proposed standard is risk-based and would apply to all engagements performed in accordance with the standards of the PCAOB. It provides a framework for an engagement quality reviewer to evaluate the main judgments made by the engagement team and the conclusions they have reached.
"By focusing the review on higher risks, the proposed standard would increase the likelihood of identifying and correcting deficiencies in the audit prior to the issuance of the auditor's report," said PCAOB Chairman Mark Olson in a statement.
The proposed standard has a 75-day comment period, ending May 12, 2008.
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