PCAOB Adopts New Requirements for Lead Auditor’s Use of Other Auditors
Jun 21, 2022
On June 21, 2022, the Public Company Accounting Oversight Board (PCAOB) adopted amendments to its auditing standards to strengthen requirements that apply to audits involving multiple audit firms. The amendments, which benefited from three comment solicitations, aim to improve the quality of audits where other accounting firms or individual accountants perform important work on the audit.
Working with other auditors can differ from working with people in the same firm, creating challenges in coordination and communication. These challenges can lead to misunderstandings about the nature, timing, and extent of the other auditors’ work and can reduce audit quality.
To address such situations, the amendments, which include changes to existing standards and adoption of a new standard, improve PCAOB standards principally by:
- Specifying certain procedures for the lead auditor to perform when planning and supervising an audit that involves other auditors; and
- Applying a risk-based supervisory approach to the lead auditor’s oversight of other auditors for whose work the lead auditor assumes responsibility.
The amendments apply to all audits conducted under PCAOB standards. Subject to approval by the Securities and Exchange Commission, the amendments will take effect for audits of financial statements for fiscal years ending on or after December 15, 2024.
Review the press release and amendments on the PCAOB's website.