RegulationAccounting StandardsPCAOB adopts auditing standard six

PCAOB adopts auditing standard six

PCAOB has adopted auditing standard six, dealing with evaluating consistency of financial statements

The
Public
Company Accounting Oversight Board
(PCAOB) has voted to adopt auditing
standard six, dealing with evaluating consistency of financial statements and an
accompanying set of amendments to the board’s interim auditing standards, which
if approved by the Securities and Exchange Commission (SEC), will become
effective 60 days after SEC approval.

The board adopted the standard and amendments in light of the Financial
Accounting Standards Board’s (FASB) release of ‘statement of financial
accounting standards’ (SFAS) 154, ‘accounting changes and error corrections’,
and soon-to-be release of ‘statement of financial accounting standards’, ‘the
hierarchy of generally accepted accounting principles’.

The new standard and related amendments update the auditor’s responsibilities
to evaluate and report on the consistency of a company’s financial statements
and align the auditor’s responsibilities with SFAS 154.

The board also removed the hierarchy of generally accepted accounting
principles (GAAP) from its interim auditing standards. It believes the GAAP
hierarchy is more appropriately located in the accounting standards.

Further Reading:

Top 50 firm fined over audit work

PCAOB budget increase boosts board’s salaries

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