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PCAOB Issues Concept Release on Audited Financial Statements

On June 21, 2011, the Public Company Accounting Oversight Board ("PCAOB") issued a concept release to solicit public comment on a proposed revision of the content and form of reports on audited financial statements.  The concept release describes a number of potential alternatives to the current auditor reporting model that are intended to improve the amount and quality of information communicated from the auditor to investors in audit reports.

The alternatives dicussed in the concept release include:

  1. a supplement to the auditor's report in which the auditor would be required to provide additional information about the audit and the company's financial statements (an "Auditor's Discussion and Analysis"),
  2. required and expanded use of emphasis paragraphs in the auditor's report,
  3. auditor reporting on information outside the financial statements, and
  4. clarification of certain language in the auditor's report.

 

The release stresses that these potential alternatives are not mutually exclusive, and the PCAOB may choose to propose formally some combination of the the approaches, or even elements of some approaches and not others.  

The public may submit written comments to the PCAOB on this concept release. Comments should be sent to:

Office of the Secretary
PCAOB, 1666 K Street, NW
Washington, D.C. 20006-2803

Comments also may be submitted via email to This email address is being protected from spambots. You need JavaScript enabled to view it. or through the Board's Web site at www.pcaobus.org. The comment period closes on September 30, 2011.

The PCAOB plans to hold a public roundtable in the third quarter of 2011 to solicit views and feedback on the alternatives presented in the concept release.

The full text of the concept release is available at:  http://pcaobus.org/Rules/Rulemaking/Docket034/Concept_Release.pdf