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PCAOB Release Offers Guidance to Audit Committees on the PCAOB Inspection Process
Practical Law Legal Update 1-520-7354 (Approx. 3 pages)
PCAOB Release Offers Guidance to Audit Committees on the PCAOB Inspection Process
by PLC Corporate & Securities
| Published on 02 Aug 2012 • USA (National/Federal) |
The Public Company Accounting Oversight Board (PCAOB) issued a release about its auditor inspection process and the meaning of its inspection results, including sample questions that public company audit committees should consider asking their audit firms about PCAOB inspections.
On August 1, 2012, the Public Company Accounting Oversight Board (PCAOB) issued a release about its auditor inspection process and the meaning of its inspection results. The purpose of the release is to provide audit committees of public company boards with information so they may have more meaningful discussions with PCAOB-registered audit firms about the results of PCAOB inspections.
The release discusses the meaning and significance of PCAOB inspection results in the context of engagement reviews and quality control reviews. It also outlines certain approaches that an audit committee could use to initiate or enhance inspection-related discussions with an audit firm.
The release provides the following sample questions that audit committees should consider asking their audit firms about PCAOB inspections:
- Was the company's audit selected for PCAOB inspection?
- Did the PCAOB identify deficiencies in other audits that involved auditing or accounting issues similar to issues presented in the company's audit?
- What were the audit firm's responses to the PCAOB findings?
- What topics were included in Part II findings (deficiencies in the firm's overall system of quality control over its audit processes) of the PCAOB's inspection report?
For a form of audit committee charter for a public company, see Standard Document, Audit Committee Charter.