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Objective

Consider how PCAOB standards should be revised to address aspects of designing and performing audit procedures using technology-assisted analysis of information in electronic form.

Most Recent Action

On June 26, 2023, the Board voted to issue a proposal for amendments to AS 1105, Audit Evidence and AS 2301, The Auditor’s Responses to the Risks of Material Misstatement related to aspects of designing and performing audit procedures that involve technology-assisted analysis of information in electronic form. The comment period is open through August 28, 2023. 

In brief, the Board’s proposal would: 

  • Specify considerations for the auditor’s investigation of items that meet criteria established by the auditor when designing or performing substantive procedures;
  • Specify that if an auditor uses audit evidence from an audit procedure for more than one purpose the procedure needs to be designed and performed to achieve each of the relevant objectives;
  • Provide additional details regarding auditor responsibilities for evaluating the reliability of external information maintained by the company in electronic form and used as audit evidence;
  • Clarify the difference between tests of details and analytical procedures, and emphasize the importance of disaggregation or detail of information to the relevance of audit evidence; and
  • Update certain terminology in AS 1105 to reflect the greater availability of information in electronic form and improve the consistency of the use of such terminology throughout the standard. 

Additional information on the proposal:

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Background

The results of the PCAOB's research project on Data and Technology indicate that auditors are expanding their use of technology-based tools to plan and perform audits. Although the staff’s research indicates that auditors are using technology-assisted analysis in audit procedures, the staff’s research has indicated a need to propose amendments to update the following auditing standards to address aspects of designing and performing audit procedures that use technology-assisted analysis of information in electronic form:

  • AS 1105, Audit Evidence
  • AS 2301, The Auditor’s Responses to the Risks of Material Misstatement

The Board’s proposal took into account requirements in other PCAOB standards, observations from the Board's oversight activities, changes to audit firms' methodologies, the activities of other standard setters and regulators, and information from investors and other stakeholders. 

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Status

The Board issued a proposal for public comment on June 26, 2023.