Commissioners gave the SEC staff the go-ahead to work with the PCAOB on making the proposed internal-control auditing standard less prescriptive and more aligned with Section 404.
The Securities and Exchange Commission is sending its accounting staff to work with the Public Company Accounting Oversight Board on additional revisions to the auditing standard that has been criticized by public companies and legislators for creating costly audits of internal controls.
At a Wednesday SEC hearing, staff members of the Office of the Chief Accountant asked the commissioners for permission to work with the PCAOB to address several concerns that were raised during the current public comment period on the revised Auditing Standard No. 2 — which both regulators loosely refer to as AS5. Saying the staff will be "fine-tuning" AS5, the commissioners voted unanimously on all the staffers' requests.
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The staff will now work on matching the tone and wording of AS5 with the SEC's revised guidance for company management on complying with Section 404, the Sarbanes-Oxley Act's provision for management's assessment of internal controls over financial reporting.
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