PCAOB proposal would expand auditors' responsibilities
Hot Topic | July 2023
Proposed amendments would require auditors to identify a company’s noncompliance with laws and regulations.
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We summarize the amendments to auditing standards proposed by the Public Company Accounting Oversight Board (PCAOB) that would require auditors to identify a company’s noncompliance with laws and regulations. We’ve summarized significant changes and potential impacts for both auditors and management.
Applicability
Proposed amendments to auditing standards
- Public companies
Relevant dates
- June 6, 2023 – The PCAOB released proposal
- August 7, 2023 – Comments due
Key impacts
The PCAOB is seeking public comment on extensive changes proposed to auditing standards related to auditors’ responsibilities over a company’s noncompliance with laws and regulations (NOCLAR), including:
- identifying laws and regulations with which noncompliance could reasonably have a material effect on the financial statements
- assessing the risks of material misstatement of the financial statements due to noncompliance with those laws and regulations, and responding appropriately
- identifying whether there are instances of NOCLAR that have or may have occurred
- evaluating those NOCLAR instances and communicating to appropriate parties, regardless of perceived materiality
Report contents
- Introduction
- Summary of significant changes and potential impacts
- Amendments to other PCAOB auditing standards
- Potential impacts to management
- Economic analysis
Download the document
PCAOB proposal
Download PDFKPMG comment letter
Download PDFMeet our team
Jody Love
Partner, KPMG US
Halie Creps
Partner, Audit, KPMG US
Jody Love
Partner, KPMG US
Halie Creps
Partner, Audit, KPMG US