Staff recruitment, development and retention have been among the
most significant challenges the US Public Company Accounting
Oversight Board (PCAOB) has faced during the past year.
The board’s chairman, Mark Olson, expects upcoming developments
in the financial reporting world to accentuate this. “Certain
anticipated changes in the financial reporting world, such as
moving towards fair value accounting… expansion of the use of
International Financial Reporting Standards and eXtensible Business
Reporting Language, will require resources to train current staff
and could substantially increase competition for staff with
appropriate expertise,” Olson told The Accountant.
Another of the board’s current challenges relates to its
statutory mandate to monitor audit firms spread across the world
that audit companies with securities traded in the US. “Since the
establishment of the PCAOB, other independent auditor oversight
systems have begun to emerge around the world,” Olson explained.
“These systems offer great potential for co-ordination, even when
regulators have differing oversight regimes and requirements.”
A recent highlight for the PCAOB was the US Securities and
Exchange Commission’s (SEC) 2007 approval of Auditing Standard
Number 5 (AS 5) – An Audit of Internal Control Over Financial
Reporting that is Integrated with an Audit of Financial
Statements.
“We are pleased with the SEC’s approval of AS 5. However, this
does not mark the finish line for the PCAOB,” Olson said.
“Successful implementation of AS 5 is vital. The new standard
should drive important improvements in the audit of internal
control. The board, and particularly our inspections and
standard-setting staff, is doing its part to aid in successful
implementation.”
An international highlight of 2007 was increased dialogue with
global counterparts. “Last year, we hosted our first international
symposium, bringing together our counterparts from more than 40
countries,” Olson said. “[Then], in December of last year, the
PCAOB issued for public comment a policy statement on enhancing
co-operation. [It] articulates an approach that would enable the
PCAOB to move beyond joint inspections towards full reliance on our
counterpart oversight bodies in other countries that meet certain
essential criteria.”
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By GlobalDataOlson continued: “We would be able to do this without
sacrificing our duty to inspect for compliance with PCAOB standards
and issue inspection reports, including a public portion. We
received a substantial amount of thoughtful comment on the
proposal.”
Considering the US audit profession at large, Olson said it is
an interesting time to be an auditor and further globalisation
appears inevitable. “It is happening before our eyes and
complexities abound,” he said.
“Some additional complexities are also driven by the growing
complexity of the underlying business and financial transactions –
such as structured transactions and off-balance sheet activities.
Our educational structure and curriculum must keep up with all of
these developments, and there is an equally important
responsibility placed on firms to ensure that they are providing
appropriate training to their staff.”
