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August 14, 2012

PCAOB adopts audit committee communication standard

The US Public Company Accounting Oversight Board (PCAOB) has adopted auditing standard No. 16 on communications with audit committees and has made amendments to other standards.

The new standard aims to ensure meaningful dialogue between auditors and audit committees in order to improve the quality of audits.

PCAOB chief auditor and director of professional standards Martin Baumann said the standard emphasises effective two-way communication required for important aspects of audits and financial statements.

The standard and the amendments replace interim auditing standards AU sec. 310, Appointment of the Independent Auditor, and AU sec. 380, Communication with Audit Committees.

If the US Securities Exchange Commission (SEC) approves the new standard it will be effective from 15 December.

The PCAOB said the standard and related amendments apply to audits of emerging growth companies if the SEC makes a determination called for under the Jumpstart Our Business Startups Act of 2012.

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