PCAOB again proses auditor-audit committee standards
The notion that audit committees need deeper interaction with the auditor has been alive and well since at least 2002, when Sarbanes-Oxley became law.
The Public Company Accounting Oversight Board (PCAOB) has taken a long-term view when it comes to creating standards that would guide this interaction. It has offered proposals on at least two occasions before it tried again in December, when it re-proposed the standard on Communications with Audit Committees. That standard was initially proposed on March 29, 2010.
The proposal requires auditors to communicate important matters regarding the audit to the audit committee. As described in the new proposed standard, the term, "communicate to" is meant to encourage strong two-way interaction between the auditor and the audit committee throughout the audit to assist in understanding matters relevant to the audit.
"Communications that are tailored to the circumstances and informative, rather than ‘boiler-plate' or standardized, will enable the auditor and the audit committee to engage in a dialogue that is more likely to benefit the audit committee in conducting its oversight responsibilities and the auditor in conducting an effective audit."
The proposal builds the current requirements regarding auditor-audit committee communications by "linking the communication requirements to the related performance requirements in other auditing standards." My sense is that this one will be passed.