Earlier this week, the Public Company Accounting Oversight Board announced updates to its research and standard-setting agendas. Similar to the SEC's approach with its short-term rulemaking agenda, going forward, the PCAOB plans to include on its research and standard setting agendas only specific projects expected to have a "public milestone (e.g., a proposal, a staff publication, or a concept release) within the next 12 to 18 months." As discussed below, the PCAOB removed three projects from its agendas, noting that after "significant work on these projects, . . . there is not a need at present to change our standards or take other action on these topics." Specific agenda updates include:
- Standard-Setting Agenda: The PCAOB added a project on auditor independence. The goal of the project is to harmonize the PCAOB's auditor independence rules with those adopted by the SEC in June 2019 and those that may be adopted following the SEC's proposal at the end of 2019. The PCAOB also dropped the "going concern" project. The PCAOB's projects regarding audit firms' quality control standards and the supervision of other auditors remain on the standard-setting agenda.
- Research Agenda: The PCAOB dropped projects related to the auditor's role with respect to other company information and with regard to procedures relating to a client's noncompliance with laws and regulations. The research agenda now focuses exclusively on the role of technology, with the PCAOB adding a project on "audit evidence." This new project is intended to study whether guidance or an amendment to the current audit evidence standard is required "given the increasing prevalence of technology-based tools and the increasing availability and use of information from sources external to the company, both in the financial reporting process and as audit evidence." This is a more specific project that supplements the PCAOB's existing research project on "data and technology," which is more generally considering "whether there is a need for guidance, changes to PCAOB standards, or other regulatory actions in light of the increased use of technology-based tools by auditors and preparers."
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