This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

U.S. comment letter on PCAOB auditing requirements on related parties, significant unusual transactions, and other amendments

Published on: Aug 19, 2014

In June 2014, the PCAOB adopted an auditing standard and amendments that established requirements for an auditor’s evaluation of a company’s identification of related parties and its relationships and transactions with those parties. Deloitte & Touche LLP has responded to the request for comments from the SEC regarding the filing by the PCAOB on Auditing Standard No. 18, Related Parties, amendments to certain PCAOB auditing standards regarding significant unusual transactions, and other amendments to PCAOB auditing standards (collectively referred to as the “standard and amendments”).

An excerpt from the comment letter is shown below:

As explained in the PCAOB’s release that accompanies the standard and amendments, related-party transactions, significant unusual transactions, and a company’s financial relationships and transactions with its executive officers have historically represented increased risks of material misstatement in company financial statements. Heightened scrutiny of these areas is important to enable auditors to identify and address the related risks of material misstatement and to maintain investor confidence in these areas as they read and understand the financial statements and related disclosures. Although the standard and amendments will result in additional audit effort and costs, we believe that the requirements of the standard and amendments will strengthen auditor  performance and result in improved alignment of the auditor’s procedures regarding related parties, significant unusual transactions, and other matters (including financial relationships with executive officers) with the requirements of the PCAOB’s risk assessment standards. As a result, we are supportive of the standard and amendments.


Related Topics

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.