PCAOB to develop auditing policies and procedures that promote the development

Pcaob to develop auditing policies and procedures

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PCAOB to develop auditing policies and procedures that promote the development of reliable financial reporting information. Rules adopted by the PCAOB must undergo a separate SEC comment period and be approved by the SEC before becoming effective. The PPG observes closely the development of all the projects on the standard-setting agenda by the PCAOB Office of the Chief Auditor and will consider academic studies that will help guide the group’s consideration on these projects. Current PCAOB projects include: (1) auditor’s reporting model; (2) auditor independence, objectivity, and professional skepticism; (3) audit transparency; (4) audits of brokers and dealers; (5) communications with audit committees; (6) part of the audit performed by other auditors; (7) assignment and documentation of firm supervisory responsibilities; (8) quality control standards; (9) codification of PCAOB standards; (10) fair value; (11) specialist; (12) confirmation; (13) related parties; (14) going concern; (15) subsequent events; and (16) attestation reporting under Regulation AB ( PCAOB 2011 ). These projects represent the most current issues on auditing standard-setting and are potential topics for accounting research. Accounting research on these topics will have the potential to influence auditing standards and the regulation of auditors. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ( U.S. Congress 2010) vested the PCAOB with expanded oversight authority over the audits of brokers and dealers registered with the SEC including inspections, enforcement, and standard-setting authority. Financial statements of broker-dealers filed with the SEC for fiscal years ending after December 31, 2008, must be certified by a PCAOB-registered public accounting firm. On July 12, 2011, PCAOB proposed attestation standards for auditors of brokers and dealers, and its staff is drafting implementation guidance on applying PCAOB standards to audits of brokers and dealers ( PCAOB 2011 ). Accounting research on these new standards and the impact of the implementation of the new standards will be of particular interest to regulators. Staff Observations from Reviews of Filings The SEC’s Division of Corporation Finance (DCF) routinely reviews all the disclosure documents by the SEC registrants to ensure that investors are provided with material information in order to make informed investment decisions both at the time of initial public offering and on a regular basis. DCF also provides interpretive assistance to companies on SEC rules and forms and proposes new and revised rules to the Commission. Through the review of registrants’ filings, comment letter process, and registrant consultation on disclosure issues, DCF is positioned to have the first-hand knowledge of the developing issues on financial reporting and application of accounting standards.
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