SOX Center

On the SEC site, see spotlight on Internal Control Reporting Provisions, which includes the SEC’s proposed guidance, “Management Reporting on Internal Control Over Financial Reporting”.

This is the first guidance from the SEC directed specifically toward management, and intended to be applied in context with the newly released draft auditing standard (AS5) published by the PCAOB this week.

Inside Sarbanes-Oxlex:SEC Publishes Guidance to Management

The Public Company Accounting Oversight Board today voted unanimously to propose for public comment a new standard on auditing internal control over financial reporting and other related proposals. The proposed standard would replace the Board’s existing internal control standard, Auditing Standard No. 2.

The proposed new standard on internal control is a principles-based standard designed to focus the auditor on the most important matters, increasing the likelihood that material weaknesses will be found before they cause material misstatement of the financial statements. The proposed standard also eliminates audit requirements that are unnecessary to achieve the intended benefits, provides direction on how to scale the audit for a smaller and less complex company, and simplifies and significantly shortens the text of the standard.

“Today’s proposal is the result of the PCAOB’s experience with the first two years of auditors’ implementation of the internal control provisions of the Sarbanes-Oxley Act,” said PCAOB Chairman Mark Olson. “The Board’s goal has been to apply the feedback we’ve received and our observations of implementation to create an auditing standard that preserves the intended benefits without resulting in unnecessary effort and costs. We believe the new standard will result in audits that are more efficient, risk-based and scaled to the size and complexity of each company. We look forward to comments on the proposal.”

PCAOB: Standard on Internal Control over Financial Reporting

The Public Company Accounting Oversight Board has announced an open meeting for 9:30 a.m. Tuesday, December 19, to consider proposing for public comment a new auditing standard to supersede the Board’s existing auditing standard on internal control over financial reporting, and other related proposals.

The meeting will be held in the Board’s open meeting room at 1666 K St. NW, Washington, DC. The meeting is open to the public and will be webcast via a link on the PCAOB’s Web site that will be made available on the day of the meeting.

PCAOB: Board to Consider Proposing a Revised Auditing Standard on Internal Control over Financial Reporting