Wednesday, December 05, 2007

PCAOB Issues for Comment Proposed Guidance Regarding the Implementation of PCAOB Rule 4012

The Public Company Accounting Oversight Board (PCAOB) today voted to issue for public comment a proposed policy statement that identifies the factors relevant to “full reliance” by the Board on the inspections systems of its non-U.S. counterparts that are sufficiently rigorous to meet the level of protection for investors that is required by the Sarbanes-Oxley Act of 2002.

“The PCAOB recognizes that cross-border cooperation is fundamental to strengthening audit quality globally. The policy statement provides the architecture for the PCAOB to increase its reliance on the inspections of foreign counterparts, including our colleagues in the European Union,” said PCAOB Chairman Mark W. Olson.

The proposed policy statement provides guidance on the Board’s Rule 4012 (Inspections of Foreign Registered Public Accounting Firms), which permits the Board to adjust its reliance on the inspections of auditor oversight entities located in the home countries of registered non-U.S. audit firms, based upon the level of independence and rigor of those entities.

PCAOB Issues for Comment Proposed Guidance Regarding the Implementation of PCAOB Rule 4012

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Monday, November 19, 2007

PCAOB - Board Approves 2008 Budget

The Public Company Accounting Oversight Board today approved a budget for calendar year 2008. The budget is based on the Board’s Strategic Plan for 2007-2012, which was created to guide the organization’s programs and operations in the coming years.

The budget, as approved, contemplates approximately $144.6 million in outlays for 2008, compared to $136.4 million for 2007.

“I believe this budget will allow the Board to fulfill its statutory mandate under the Sarbanes-Oxley Act of 2002 to oversee the auditors of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports,” said Mark W. Olson, PCAOB Chairman.


The PCAOB’s Strategic Plan is available online at http://www.pcaobus.org/About_the_PCAOB/Strategic_Plan.pdf

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Tuesday, October 23, 2007

PCAOB Urged to Take a 'Clean Sheet' Approach to Standard Setting Priorities at Oct. 17 SAG Meeting

SAG members were concerned that items on PCAOB's priorities list from prior years remain uncompleted. They also asked if the PCAOB had sufficient resources to complete their projects. Some noted the PCAOB had become a follower rather than a leader, and suggested the PCAOB try to leverage off work being done by the AICPA's Auditing Standards Board (ASB) and the International Auditing and Assurance Standards Board (IAASB) where those groups were ahead of the PCAOB on certain standards.

PCAOB Urged to Take a 'Clean Sheet' Approach to Standard Setting Priorities at Oct. 17 SAG Meeting

Labels: AICPA, ASB, FEI, IAASB, IFRS, pcaob, sarbanes oxley

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Monday, October 22, 2007

PCAOB Told to Plan for Global Standards

Members of the Public Company Accounting Oversight Board's advisory group are split on the question of how hard it would be for the auditing profession to adapt to International Financial Reporting Standards.

In light of a recent Securities and Exchange Commission proposal that U.S. companies should be given the choice between IFRS and U.S. generally accepted accounting principles, some PCAOB advisers worried that such a choice would overly burden accounting professors who are already strapped for resources. They also questioned whether the International Accounting Standards Board's version of IFRS is of high enough quality to meet U.S. regulators' and investors' expectations. The IASB expressed similar worries on Thursday.

The larger accounting firms, however, assured the advisory group that they have been training their staffs on using IFRS. Perhaps surprisingly, a member of the Financial Accounting Standards Board spoke in favor of a move to international standards.

PCAOB Told to Plan for Global Standards

Labels: GAAP, IFRS, pcaob, sec

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PCAOB Issues Staff Guidance On Auditing Internal Control in Smaller Public Companies

The Public Company Accounting Oversight Board today published for public comment staff guidance on auditing internal control over financial reporting in smaller public companies.

The guidance explains how auditors can apply the Board's internal control auditing standard, Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements, to audits of smaller, less complex public companies.

When it adopted Auditing Standard No. 5 in May, the Board committed to provide additional guidance on applying the standard to audits of smaller public companies. Auditing Standard No. 5 provides direction to auditors on scaling the audit based on the company’s size and complexity.

PCAOB Issues Staff Guidance On Auditing Internal Control in Smaller Public Companies

Labels: as5, pcaob, small business

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Saturday, October 13, 2007

Restatements hit market less under Sarb-Ox -study

Market reaction is less volatile following company announcements they will restate financial results since the Sarbanes-Oxley corporate reform law was enacted, according to a new paper authored by two Public Company Accounting Oversight Board (PCAOB) economists.

That suggests investors believe restatement announcements convey more timely and higher quality information, leaving them with less uncertainty about companies that must restate their financial data, said the report, which was released late Thursday.

The study will be discussed on Oct. 18 when a PCAOB advisory group meets.

Restatements hit market less under Sarb-Ox -study

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Tuesday, May 29, 2007

10 Threats to SOX Compliance for Smaller Public Companies

Lord & Benoit, a leading Sarbanes-Oxley research and consulting firm, is applauding the efficiencies and affordability of this week's PCAOB and SEC actions requiring smaller public companies to comply with Sarbanes-Oxley this year. To help CFOs to navigate wisely through the process, Lord & Benoit just published a study, 10 Threats to SOX Compliance for Smaller Public Companies.

In summarizing the results, Lord & Benoit suggests this list should be used by CFOs as a starting point for a macro-level risk assessment at smaller public companies. Identifying potential concerns, developing action plans to remediate these risks, and taking quick action can minimize the likelihood of an adverse Section 404 report at the end of the first year of compliance.

10 Threats to SOX Compliance for Smaller Public Companies

Labels: as5, pcaob, sec, small business

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Saturday, May 19, 2007

Just Days Away: The Fate of 404

For many corporate critics of the Sarbanes-Oxley Act, the 2002 law has become synonymous with added cost and work. But when they've voiced their frustration with regulators and congressmen, asking them to amend or repeal the law, they're usually talking about just one of its provisions: Section 404.

After nearly five years of hearing concerns about uncertainty regarding management's responsibilities under 404 and complaints about burdensome audits under its companion auditing standard, the Securities and Exchange Commission may formally make the first change to the provision before Memorial Day weekend. In back-to-back meetings, the SEC will vote on its proposed management guidance for complying with the internal-control rule on May 23, and the Public Company Accounting Oversight Board will decide whether to adopt its new companion auditing standard on May 24.

Just Days Away: The Fate of 404

Labels: as5, pcaob, sec

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PCAOB to vote on Final Audit Standards

On May 24, the Public Company Accounting Oversight Board (PCAOB) will vote on a final standard on auditing internal control over financial reporting, as well as a related independence rule and conforming amendments to the board's auditing standards.

If adopted, the new standard would supersede the board's existing auditing standard, Auditing Standard No. 2, "An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements."

PCAOB to vote on final audit standards

Labels: AS2, as5, pcaob

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Tuesday, May 08, 2007

PCAOB Concludes First International Auditor Regulatory Institute

Representatives from auditor regulators and government agencies from more than 40 countries convened on Wed., May 2, in Washington, D.C., to learn more about the PCAOB's programs and how it carries out its mandate under the Sarbanes-Oxley Act of 2002.

The institute took place over two and a half days, with one full day devoted to discussions about the PCAOB's inspections program. The institute also covered other activities of the PCAOB, including standard-setting, the enforcement process and international cooperation.

The Sarbanes Oxley Act directs the PCAOB to oversee and periodically inspect all accounting firms that regularly audit U.S. public companies. More than 780 audit firms currently registered with the PCAOB are located outside of the United States, spanning 80 countries.

PCAOB Concludes First International Auditor Regulatory Institute

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PCAOB Soliciting Nominations for Standing Advisory Group

The Public Company Accounting Oversight Board is soliciting nominations and re-nominations for members of its Standing Advisory Group.

Created in 2003, the 31-member SAG assists the audit firm overseer in carrying out its standards-setting responsibilities.

The PCAOB is currently seeking nominations and re-nominations annually to fill 15 positions. Appointments are for two-year terms. Nomination forms are available on the PCAOB Web site, www.pcaobus.org. The deadline for submissions is June 15, 2007.

PCAOB Soliciting Nominations for Standing Advisory Group

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Sunday, April 29, 2007

The Enron attitude is still alive and kicking

The ghost of Enron still haunts Charles Niemeier.

More than five years after the energy trader's collapse, Niemeier worries that the lessons of its failure are being ignored.

"What scares me the most about Enron is not what they did wrong, but what they did right," he said. "They took the rules and used them to build a massive illusion."

Niemeier, a member of the Public Company Accounting Oversight Board, fears too many companies see Enron as an aberration rather than a symptom of a larger problem.

The Enron attitude is still alive and kicking

Labels: enron, pcaob

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Thursday, April 19, 2007

Testimony Concerning The Sarbanes-Oxley Act of 2002 and Its Impact on Small Businesses

Chairman Kerry, Ranking Member Snowe, and Members of the Committee:

I am pleased to appear today on behalf of the Public Company Accounting Oversight Board ("PCAOB" or the "Board"). to speak about the impact of the Sarbanes-Oxley Act of 2002 (the "Act") on small business, and, in particular, the PCAOB’s oversight of small audit firms. I am also pleased to join Chairman Cox before you today. The PCAOB works closely with the Securities and Exchange Commission ("SEC") to achieve our shared goal of protecting the interests of the investing public in the preparation of informative, accurate and independent audit reports on public company financial statements.

I. Introduction and Background

This Committee’s focus on small business and entrepreneurship and the Committee’s particular focus today on the impact of the Act are both appropriate and very timely. The PCAOB, along with our colleagues at the SEC, are in the final stages of replacing Audit Standard 2, which I will later describe in greater detail. A priority concern that triggered our current efforts is the desire to assure that the audit standard mandated by the Act can be conducted in a manner consistent with the size and complexity of America’s small publicly traded companies.

Testimony Concerning The Sarbanes-Oxley Act of 2002 and Its Impact on Small Businesses

Labels: AS2, pcaob, small business

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Wednesday, April 18, 2007

Oxley Unhappy with SOX; Blames PCAOB for Problems

Former Congressman Michael Oxley is unhappy with implementation of the corporate reform legislation that bears his name.

In an interview with CFO.com, he was asked, “Are you happy with the way Sarbanes-Oxley has been implemented?” His answer: “Not really. The law has gotten a lot of criticism.” He noted that the vast majority of the complaints center on Section 404, which requires an audit of internal controls over financial reporting.

“It was Auditing Standard No. 2, promulgated by the PCAOB (Public Company Accounting Oversight Board), that started all the problems,” he said. “It was two paragraphs long, but by the time the PCAOB was done, it was 330 pages of regulations. It was far too prescriptive and [more] expensive than anyone anticipated. So, [the PCAOB] and the Securities and Exchange Commission proposed a risk-based assessment to better define material weakness, with more emphasis on internal audit. It adds flexibility with smaller companies.”

Oxley Unhappy with SOX; Blames PCAOB for Problems

Labels: 404, AS2, Michael Oxley, pcaob, sarbanes oxley

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Monday, April 16, 2007

Deputy Chief Auditor to Leave PCAOB

The PCAOB announced that Laura J. Phillips, Deputy Chief Auditor, will leave the Board later this year. Phillips has been responsible for providing technical direction on the development of the Board’s standards, including ensuring that standards and guidance were communicated to auditors of public companies and other interested parties. Most recently, Phillips led the PCAOB’s efforts to facilitate implementation of the internal control reporting requirements of the Sarbanes-Oxley Act. Phillips has not yet accepted another position.

Deputy Chief Auditor to Leave PCAOB

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Thursday, April 05, 2007

SEC Tells Staff to Revise AS5

The Securities and Exchange Commission is sending its accounting staff to work with the Public Company Accounting Oversight Board on additional revisions to the auditing standard that has been criticized by public companies and legislators for creating costly audits of internal controls.

At a Wednesday SEC hearing, staff members of the Office of the Chief Accountant asked the commissioners for permission to work with the PCAOB to address several concerns that were raised during the current public comment period on the revised Auditing Standard No. 2 — which both regulators loosely refer to as AS5. Saying the staff will be "fine-tuning" AS5, the commissioners voted unanimously on all the staffers' requests.

SEC Tells Staff to Revise AS5

Labels: 404, as5, pcaob, sec, sox

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