U.S. corporations and accountants concerned over rising audit costs due to Sarbanes-Oxley requirements may soon have more to worry about — including another spike in audit charges as a result of the Public Company Accounting Oversight Board’s proposed new standard for engagement quality review.The stricter standard, which was initially proposed back in February and would apply to audits of public companies performed under PCAOB standards, is risk-based and designed to ease identification and speed correction of audit deficiencies prior to issuing the auditor’s report.

Currently, under Section 103 of SOX, each registered public accounting firm is required to provide a “concurring” or second-partner review and approval of each audit report (and other related information), as well as concurring approval in its issuance. The new standard would strengthen the second-partner review, while the proposed guidelines provide a framework for an EQR to evaluate the judgments and conclusions of the engagement team in preparing the engagement report.

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