Auditor’s report changes
The PCAOB updated, on Aug. 23, 2018, its staff guidance on changes to the auditor’s report that took effect for calendar year-end audits of Dec. 31, 2017, annual financial statements. The updates to the guidance relate to the following topics:
- Voluntary disclosure of certain audit participants
- Auditor tenure
- Auditor reporting on internal control over financial reporting
- Explanatory and emphasis paragraphs
- Auditor reporting on supplemental information, interim financial information, and special reports
Broker-dealer inspection report
On Aug. 20, 2018, the PCAOB released its report on 2017 inspections of broker-dealer auditors. The executive highlights accompanying the report include the following important points:
- “Auditors should focus on improving their quality control systems to perform high quality audits and attestation engagements.
- “Overall deficiencies remained high, although inspectors found fewer independence violations than in past years.
- “Broker-dealer owners and audit committees (or equivalent) are encouraged to discuss these results with their auditors.”
Draft five-year plan
On Aug. 10, 2018, the PCAOB released a draft of its five-year strategic plan and, for the first time ever, is seeking public comment on the plan.
The draft plan contains five strategic goals:
- “Drive improvement in the quality of audit services through a combination of prevention, detection, deterrence, and remediation
- “Anticipate and respond to the changing environment, including emerging technologies and related risks and opportunities
- “Enhance transparency and accessibility through proactive stakeholder engagement
- “Pursue operational excellence through efficient and effective use of our resources, information, and technology
- “Develop, empower, and reward our people to achieve our shared goals”
Comments were due Sept. 10, 2018.