PCAOB Adopts Standard on Auditor Communications with Audit Committees

At its open meeting on August 15, the Public Company Accounting Oversight Board adopted Auditing Standard No. 16, Communications with Audit Committees, and related amendments to other PCAOB standards. AS 16 requires auditors to engage in certain communications with audit committees and is intended to foster a meaningful dialogue on important audit and financial statement matters. The adoption of AS 16 follows a lengthy rulemaking process that began in March 2010 and involved both a proposal and reproposal of the standard. The final standard addresses many of the comments received, notably by focusing the required communications on significant matters tied to existing audit procedures. The Alert Memo highlights the most significant of the requirements included in the final standard, which should be of particular interest not only to audit committees but also to financial intermediaries in performing diligence related to securities offerings.