PCAOB sets new plans to boost standards compliance.

TLDR

• The PCAOB updated its standard-setting, research, and rulemaking agendas to reflect recent progress.
• Recent updates include completed standard-setting projects on quality control and general responsibilities of auditing.

The Public Company Accounting Oversight Board (PCAOB) has been making significant progress in modernizing its older standards and rules. Since 2022, the PCAOB has completed four standard-setting projects and issued proposals on six more standard-setting and rulemaking projects. Recently, the PCAOB updated its standard-setting agendas to reflect the progress and upcoming projects. Two of the completed projects include standards on quality control and the general responsibilities of auditing in conducting an audit, although they still need approval from the Securities and Exchange Commission (SEC). The quality control standard received an opposing vote from board member Christina Ho, indicating potential challenges ahead.

One of the projects that the PCAOB is facing opposition on is the NOCLAR standard, which requires auditors to look for signs of noncompliance with laws and regulations. The PCAOB has added new projects to both its short-term and mid-term standard-setting agendas. These projects include Inventory, Other Reporting, and internal audit. The addition of the internal audit project may provoke pushback from groups like the Institute of Internal Auditors.

The PCAOB has been updating many of the older standards inherited from the American Institute of CPAs since its establishment in 2003. SEC chairman Gary Gensler has been pushing for this standards overhaul, appointing Erica Williams to chair the board. With the upcoming election in November, the PCAOB is prioritizing getting the standards overhaul done in case of a change in the White House’s approach to regulation. Additionally, the PCAOB recently removed a project from its agenda on Follow-On Disciplinary Proceedings, despite recent actions demonstrating a tougher stance on audit firms by the PCAOB and SEC.

Overall, the PCAOB is making strides in updating and modernizing its standards, but challenges and opposition remain, especially with upcoming projects on the horizon.