At its meeting on May 24, 2007, the Public Company Accounting Oversight Board (PCA)B) adopted Accounting Standard No. 5 (AS5), “An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements,” to replace its previous internal control auditing standard, AS2.

 The effective date for adoption of AS5 is for fiscal years ending on or after Nov. 15, 2007, with early adoption permitted. The standard now goes to the U.S. Securities and Exchange Commission (SEC) for approval – which is the case for all PCAOB standards before they become “final.” PCAOB staff noted on the webcast that the definition of material weakness in AS5 – which PCAOB said conforms to SEC definition of material weakness approved at SEC meeting on May 23 -- must be complied with, after AS5 is approved by the SEC, even for audit firms not yet adopting full AS5 until the effective date.

 PCAOB also approved related independence and conforming rules. Details are in the PCAOB press release available here: http://www.pcaobus.org/News_and_Events/News/2007/05-24.aspx