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The PCAOB will take a hard look at off-balance sheet entities, underwriting standards, gaps in regulatory coverage, and flawed risk management, PCAOB Chairman Mark Olson said. This process undoubtedly will lead to regulatory and legislative improvements.
Speaking at the FEE Conference on Audit Regulation in Brussels, Olson outlined that in the coming year, the PCAOB will explore a number of the recommendations made by the Department of the Treasury’s Advisory Committee on the Audit Profession this year, which include taking a fresh look at the auditor’s report, assessing the nature and structure of a national fraud center, considering additional transparency reporting, and evaluating the feasibility of identifying meaningful indicators of audit quality.
Olson referred to a ‘practice alert’ issued last week on potential areas of heightened audit risk which include issues such as fair value measurement, other-than-temporary impairment, and going concern assessments.
“You will be interested to know that our review of additional transparency reporting requirements will take into careful consideration the EU’s reporting requirements in Article 40 of its Eighth Directive”, Olson said.