Audit regulator to meet with U.S. Chamber, companies to hear complaints
The chairman of the Public Company Accounting Oversight Board, James Doty, said Wednesday that board member Jeanette Franzel will meet with representatives of the U. S. Chamber of Commerce and eight companies on Thursday to discuss concerns about the unintended consequences of the PCAOB inspection process and changes to internal controls reviews.
The Chamber said in a letter to the PCAOB in May that its members believe the PCAOB, the independent auditing regulator established by the Sarbanes-Oxley Act of 2002, is imposing new “burdens” on business by using the inspections process to pressure auditors to ask more of companies.
Franzel, in a speech at the American Accounting Association annual meeting in early August said that, despite the fact auditors have been making some progress in improving their audits of internal controls over company financial reporting, the regulator continues to see auditors having trouble meeting the standards and some firms still have significant work to do to meet the requirements of PCAOB auditing standards.
In particular, inspections show that the vast majority of companies restating prior year financial statements because of material misstatements or errors received a “clean” audit opinion in the year in which the restatement was announced.
“Notably,” Franzel said in the speech, “a number of these restated opinions arose during or after a PCAOB inspection.”