Search
  • Daniel Goelzer

PCAOB Updates its Standard-Setting Agenda

In May, the Public Company Accounting Oversight Board released a new standard-setting and research project agenda. See PCAOB Announces an Ambitious Standard-Setting Agenda, April-May Update. On October 12, the Board issued an updated agenda, adding two new standard-setting initiatives and one new research project. The Board also revised the target action dates for three projects.


The new standard-setting projects are:

  • Amendments Related to Certain Aspects of Designing and Performing Audit Procedures that Involve Technology-Assisted Data Analysis. This project will consider how PCAOB standards should be revised to address designing and performing audit procedures using technology-assisted data analysis. One of the projects on the Board’s research agenda is examining the increased use of technology-based tools by auditors and preparers. The Board states that, while results of that research indicate that PCAOB standards do not preclude auditors' use of technology, updates to some standards may be necessary.

  • Interim Standards – AS 1000. The PCAOB will consider changes to auditing standards in the AS 1000 series (General Principles and Responsibilities) and to AS 2815, The Meaning of "Present Fairly in Conformity with Generally Accepted Accounting Principles. The AS 1000 series consists of four standards: AS 1001, Responsibilities and Functions of the Independent Auditor; AS1005, Independence; AS 1010, Training and Proficiency of the Independent Auditor; and AS 1015, Due Professional Care in the Performance of Work. These standards are substantially the same as the AICPA standards the PCAOB adopted on an interim basis in 2003. The staff believes that “the concepts in these standards remain sound, but the standards could be modernized and streamlined through updates that would clarify auditor responsibilities and enhance the usability of the standards by making them easier to read, understand, and apply.”

The Board anticipates issuing proposals for comment in both of these new projects during 2023.


The project added to the Board’s research agenda is entitled Firm and Engagement Performance Metrics. This project will assess the need for guidance, changes to standards, or other actions in light of the increased disclosure and demand for firm and engagement metrics. As part of the project, the staff will evaluate metrics that audit firms already disclose to audit committees and the public. Performance metrics, or audit quality indicators, have been under consideration for some time. In 2008, the Department of Treasury's Advisory Committee on the Auditing recommended that the PCAOB determine the feasibility of developing key indicators of audit quality and of requiring audit firms to publicly disclose these indicators. In 2015, the PCAOB issued a concept release on audit quality indicators and invited public comment on 28 potential indicators.


In addition to these new matters, the Board updated the timeline for three previously-announced projects:

  • The anticipated timing for publication of a re-proposal of the updated standard on the confirmation process has moved up to 2022 from 2023. The Board plans to issue the re-proposal before the end of this year.

  • The standard-setting project on the auditor’s consideration of possible noncompliance with laws and regulations and the project on updating the Board’s attestation standards have both been pushed back. The Board now anticipates issuing proposals in these two projects in 2023, rather than 2022, as previously announced.

The Board removed from its agenda the project on standards governing the principal auditor’s use of other auditors. That project was completed by the adoption of a final standard in June. See PCAOB Strengthens the Standards for Audits Involving Multiple Auditors, June-July 2022 Update. The content and timing of other standard-setting and research projects on the agenda published in May are unchanged.


Comment: Audit committees should follow developments in the new research project on performance metrics. Depending on the outcome, this project could provide committees with a useful new set of tools for evaluating engagement team and audit firm performance. Moreover, if the Board promulgates a set of performance metrics, audit firms will likely seek to maximize their scores on these indicators. This could, in turn, impact engagement staffing and performance. Hopefully, the metrics would also have the effect of increasing audit quality. In any event, the development of widely accepted audit quality indicators could have direct and indirect implications for the work of audit committees.

14 views0 comments

Recent Posts

See All

Since 2019, the Public Company Accounting Oversight Board’s annual inspections program has included a “target team.” The target team examines how auditors handled specific issues on a cross-firm basi

Audit Analytics (AA) has released Twenty-Year Review of Audit Fee and Non-Audit Fee Trends, its annual analysis of fees paid to external auditors. After a decline in 2020, average audit fees increase