The Public Company Accounting Oversight Board announced that the Securities and Exchange Commission has approved PCAOB Auditing Standard No. 4 -- "Reporting on Whether a Previously Reported Material Weakness Continues to Exist."
The standard applies when auditors report on material weakness after a date set by management to address the internal control.
"Investors and issuers told the board that this standard would provide assurance that public companies are working to address issues identified during the assessment of the companies' internal control," said acting chairman Bill Gradison, in a statement.
The PCAOB will issue a concise outline of the affirmative audit steps set forth in Auditing Standard No. 4, as ordered by the SEC. The SEC also considered how best a company's management could disclose reports by management and auditors on whether a previously reported material weakness continues to exist.
The standard, adopted by the PCAOB on July 26, 2005, establishes a stand-alone engagement that is entirely voluntary after the company has disclosed a material weakness under Section 404 of the Sarbanes-Oxley Act.
The text of the standard can be found at
