Board Proposes Standard Regarding Elimination of Material Weakness in Internal Control

The Public Company Accounting Oversight Board today voted unanimously to propose for public comment a standard that would apply when auditors report on the elimination of a material weakness in a company's internal control over financial reporting. The proposed standard would establish a voluntary engagement that would be performed at the election of the company.

Section 404 of the Sarbanes-Oxley Act of 2002 requires public companies to annually provide the investing public with an assessment of the company’s internal control over financial reporting. The company’s independent auditor must attest to, and report on, management’s assessment. As companies have begun to include these reports in their annual financial statement filings, investors are receiving more information about the company’s financial reporting process than was available to them in the past.

See full Press Release and see WebCPA Article.