PCAOB to Initiate Broad Discussion of Issues Relating to Auditor Independence
The Public Company Accounting Oversight Board (PCAOB) is conducting an open meeting at its headquarters in Washington DC, on Tuesday, August 16, to consider a concept release on ways that auditor independence, objectivity, and professional skepticism could be enhanced, including mandatory audit firm rotation. The concept release will solicit public comment.
James R. Doty, Chairman of the PCAOB, in a speech delivered to the Securities and Exchange Commission and the Financial Reporting Institute on June 2 said that the "PCAOB expects to issue several policy documents in the near-term. The objective is to foster broad debate and research about ways to enhance both the relevance and credibility of audits, and to provide the investing public a better understanding of what an audit is through enhanced transparency."
Doty said that the board plans on "long comment periods to allow for evidence-gathering and research."
The first of the PCAOB's policy documents, the Concept Release on Possible Revisions to PCAOB Standards Related to Reports on Audited Financial Statements, was issued by the board on June 21.
In his speech, Doty also referred to a related July 2009 concept release that sought comments on whether the board should require engagement partners to sign audit reports. He said that the board was now working "to articulate an approach that would retain the substance of the benefits discussed while addressing legitimate concerns."