The Public Company Accounting Oversight Board's top auditor offered some suggestions for the third year of life under the Sarbanes-Oxley Act, while speaking at the 25th Annual Securities and Exchange Commission and Financial Reporting Institute Conference on June 8.
Thomas Ray, the board's chief auditor and director of professional standards, pointed to the board's May release of a plan to improve implementation of SOX's internal control reporting requirements by focusing on efficiency during inspections.
Ray said that he believes major opportunities for increased efficiency exist in two areas -- the auditor's evaluation of management's assessment process, and how the auditor's risk assessment is applied to the nature, timing and extent of the tests of controls. He suggested that the auditor's documentation of their evaluation of management processes don't need to be extensive, but just show that the auditor is satisfied that management has an appropriate basis for its conclusion.
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