Regulators and lawmakers are considering changing some of the laws and rules for the auditing process of financial firms. The regulation in place had been outdated, and researchers said it did not reflect the current environment. Auditors set the standard for the firms they audit, and if the auditors’ own standards were not realistic or relevant, it made the value and rules they set useless. Regulators considered setting different standards, and updating the procedures, but have not yet set any definitive change to the quality control process.
Key Takeaways:
- Next month, the PCAOB is expected to discuss a preliminary proposal intended to ensure that audit firms are more proactive in identifying emerging risks.
- The concept release has yet to be publicly shared, but public feedback on it would help the board form a proposal.
- Any major changes would be the first since 2003, and according to one board member, a lot has been learned since then.
“Changes in technology and the structure of audit firms have prompted a U.S. regulator to consider tweaking rules governing the controls audit firms use to determine the quality of their audits.”
