Date: March 31, 2015
Speaker: James R. Doty, Chairman
Event: PCAOB Open Board Meeting
Location: Washington, DC
The reorganization of the PCAOB's auditing standards under consideration today is an important step in promoting the investing public's interest in audit quality. This reorganization provides auditors and others a logical framework and easy access to the standards governing the conduct of audits.
I want to applaud the staff in the Office of the Chief Auditor who worked on this project and staff in the Office of the General Counsel and the Center for Economic Analysis who also provided valuable assistance. I would also like to thank the SEC staff for their assistance and close consultation in this effort.
It should come as no surprise to any professional person that auditing literature is extensive. This project involved the complicated task of reordering in a logical fashion the robust volume of existing auditing standards that the profession developed before the PCAOB was formed, and integrating these with the many new auditing standards that the PCAOB has adopted in the 12 years since. Together, these standards consist of more than 1,000 pages of rule text. Public comment on the proposed reorganization was helpful to ensure that the new topical structure is intuitive and that auditing standards will be easier to find.
In this regard, the project didn't stop with the intellectual framework of reordering. The reorganization involved more than 150 pages of numbering, cross-referencing and other changes to present both the profession's original standards and PCAOB-issued standards in the new framework. To assist users in evaluating the proposed changes in context, the staff developed an online demonstration version of the reorganized auditing standards. Comments received on the demonstration version were also helpful in promoting audit quality and compliance by allowing us to make sure that auditors can easily navigate and find the applicable standards.
I am pleased that auditors and other users will no longer have to jump back and forth between what we called "interim" standards and PCAOB-issued standards. The reorganization does not make additional work for auditors. Rather, it should make professional practice easier. We will now have one set of auditing standards under one integrated framework. Going forward we will change or add to those standards as needed, consistent with our guidance on economic analysis.