PCAOB Solicits Additional Public Comment on Proposed New Requirements for Lead Auditor’s Use of Other Auditors

The Public Company Accounting Oversight Board (PCAOB) today issued a second supplemental request for comment on its proposal to strengthen requirements that apply to audits involving multiple audit firms. The comment period runs through November 30, 2021.

In many audits, the lead auditor issues the auditor’s report, but other auditors perform important audit work to assist the lead auditor in obtaining sufficient appropriate audit evidence in support of the lead auditor’s opinion(s). The roles of other auditors have become more significant and have evolved as companies’ global operations have grown.

Working with other auditors can differ from working with people in the same audit firm, creating challenges in coordination and communication. These challenges can lead to misunderstandings about the nature, timing, and extent of the other auditors’ work and can detract from the quality of the audit.

To address the challenges of working with other auditors, the PCAOB previously issued a proposal to strengthen requirements regarding a lead auditor’s responsibilities for planning, supervising, and evaluating the work of other auditors. The stated aim of the proposal has been to increase the lead auditor’s supervision of the work of other auditors and to enhance the lead auditor’s ability to prevent or detect deficiencies in the other auditors’ work.

The PCAOB sought additional comment on that proposal in September 2017. Today’s request for comment seeks further input on certain revisions to the initial proposal that are designed to improve the approach.

“It is important for investor protection that the lead auditor sufficiently plans, supervises, and evaluates the work of other auditors,” said PCAOB Acting Chairperson Duane M. DesParte. “With the supplemental request for comment we issue today, we look forward to receiving further stakeholder input as we move to strengthen existing requirements.”

Since it last solicited public comment on this proposal in 2017, the PCAOB has continued to review the work performed in audits that involve other auditors and to engage with stakeholders and other auditing standard setters in this area. Today’s proposed amendments are intended to (1) adjust certain requirements to better take into account the lead auditor’s role in the audit and (2) improve the readability and usability of the amendments and facilitate their implementation.

The public is encouraged to comment on the revisions proposed in the release or on any other aspect of the proposed amendments. After this round of public comment, the Board intends to consider the comments received and decide whether to adopt final amendments.

Learn more at the Supervision of Audits Involving Other Auditors project page. For more information regarding the PCAOB’s standard-setting activity, visit our Standards page.

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About the PCAOB

The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The PCAOB also oversees the audits of brokers and dealers, including compliance reports filed pursuant to federal securities laws.

Contact

PCAOB Office of Communications and Engagement
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