PCAOB Auditing Standard No. 16 Outlines Requirements for Communications between Audit Committees and Auditors

01/31/2013

“The audit committee directly oversees management’s reporting of the company’s financial position and results to investors. Auditors validate. Naturally, both agents should support each other’s work with an open dialogue about how to protect investors from misleading or inadequate management reports.” 

                - James R. Doty, PCAOB Chairman 
                  PCAOB Open Board Meeting, Aug. 15, 2012

The Public Company Accounting Oversight Board (“PCAOB”) recently issued Auditing Standard No. 16, Communications with Audit Committees (“Standard 16”), to provide a framework for the discussions that an auditor must undertake with the audit committee of its public company clients. Approved by the Securities and Exchange Commission on December 20, 2012, Standard 16 assembles numerous best practices previously followed by first-rate auditors and combines them with new articulations in a single and comprehensive auditing standard. It provides clear guidance not only to auditors, but also to audit committees, regarding the conversations the two parties should be having throughout the course of an audit engagement. Standard 16 applies to audits of fiscal years beginning on or after December 15, 2012.

To read the full alert, click on the PDF linked below.

PDF - PCAOB-Auditing-Standard-16.pdf

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