PCAOB Proposes Significant Changes to the Audit Report – From PWC

The PCAOB has again proposed changes to the standard audit report in which the PCAOB proposes that the report disclose additional information, for example about communications to the audit committee and about judgment or estimate related issues. Here is the link to a discussion by PWC, CLICK HERE. Comments about the proposal are due by August 2016.

This is a modified version of a prior PCAOB proposal. I’m not particularly convinced that the proposal requires a detailed discussion by me at this time as, similar to legislation, the proposal will change over time and whether or not it will ever be enacted is uncertain. However, given that this is a second serious attempt to enact a change in the audit report for audits performed and that are subject to PCAOB oversight, I must believe that this attempt will have an increased chance of being enacted.

I continue to believe that the current audit report suffers from significant limitations that reduce or limit its usefulness and relevancy for investors. I question the number of audits that would be performed if not for the statutory requirement? And we are seeing other efforts to increase discussions and disclosures that are thought to be useful to investors, such as the activities of the Sustainability Accounting Standards Board and other activities by the PCAOB.

In general, these activities also should benefit the external and internal audit professions as they will make their activities even more relevant, and also likely increase their workload.

One other thought: where are audit committees on this? I believe that in general they should support these efforts: on the one hand these activities might increase audit committee complexity and workload, but on the other hand, as the audit committee is significantly dependent on information that is provided by other people (because the audit committee is not involved in the day-to-day activities of the business, and its role is diligent and informed “oversight”), this information and these disclosures tend to provide the audit committee with additional information that might help in the audit committee member’s oversight effectiveness.

Best, Dave Tate, Esq. (San Francisco/California), and here is a link to my audit committee guide, CLICK HERE

PCAOB proposes changes to audit report

PCAOB Rules to Improve Transparency by Disclosing Engagement Partner Name and Information about Other Audit Firms are Approved by SEC

Short and brief, the following is a link to the PCAOB site if you want to read more about this new change (Click Here), but in truth, I just don’t see why this took so much effort and time to approve. I don’t see this as a big deal. Do you? Am I missing something? In any event, I’m passing this along.

Best, Dave Tate, Esq. (San Francisco / California)

CAQ Report Re Discussions With Audit Committees Re Audit Quality Indicators; Auditor Assessment Tool; Tate’s Excellent Audit Committee Guide

The Center for Audit Quality (CAQ) has published a new report summarizing it’s discussions with audit committees about key audit quality indicators. Here is a link to the announcement which also contains a link to the report: CLICK HERE

And here is a snapshot of a relevant part of the announcement (you can also see the entire wording by clicking the above link):

CAQ discussions with AC about audit quality indicators

Keep in mind, however, that the PCAOB also is working on these issues, i.e., key indicators for audit committee or board evaluations of the external auditor, and audit committees already are required by law to oversee the hiring and performance of the external auditor. In my opinion if the PCAOB does issue new rules or materials on these issues, those new rules or materials will generate more audit committee and board oversight or activity than the CAQ materials. Nevertheless, the CAQ materials and discussions are helpful. Thus, here is a link to materials that the CAQ has already issued to help audit committees evaluate the external auditor: The CAQ Auditor Assessment Tool

And here is a link to Tate’s Excellent Audit Committee Guide (updated January 3, 2016), click on the following link, http://wp.me/p75iWX-q

Dave Tate, Esq. and CPA licensed in California (inactive), San Francisco/California


Tate’s Excellent Audit Committee Guide – updated 1/3/2016 – 183 pages – read, use it, and pass it along

Hello all. Tate’s Excellent Audit Committee Guide is updated – click on the following link for the pdf of the January 3, 2016, updated Tate’s Excellent Audit Committee Guide. Please read and use it, and pass it along to other people who would be interested,

Click to access tates-excellent-audit-committee-guide-01032016-with-appendix-a-final.pdf

Going forward, I have also made this blog, http://auditcommitteeupdate.com, my blog for audit committee, D&O, civil litigation, risk, compliance, business, etc. posts. My prior blog, http://directorofficernews.com, still exists, so you can still access that blog or the numerous past posts.

Dave Tate, Esq., and CPA in California (inactive), San Francisco and throughout California. My other blog for trust, estate, conservatorship and elder abuse litigation is http://californiaestatetrust.com