The PCAOB issued for public comment a new auditing standard on engagement quality review and a conforming amendment to the Board’s interim quality control requirements. The proposed standard provides a firmer framework for an engagement quality reviewer to objectively evaluate the significant judgments made by the engagement team and the conclusions reached in forming the overall conclusion on the engagement and in preparing the engagement report.
Section 103 of the Sarbanes-Oxley Act of 2002 directs the Board to include in its auditing standards a requirement that each registered public accounting firm "provide a concurring or second partner review and approval of [each] audit report (and other related information), and concurring approval in its issuance." The proposed standard, which would apply to all engagements performed in accordance with the standards of the PCAOB, is risk-based and designed to increase the likelihood that engagement deficiencies will be identified and corrected prior to the issuance of the auditor's report.
"By focusing the review on higher risks, the proposed standard would increase the likelihood of identifying and correcting deficiencies in the audit prior to the issuance of the auditor's report", said PCAOB Chairman Mark W. Olson
Deadline for comments is 12 May 2008.
Press release
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