PCAOB Proposes Significant Changes to Auditor’s Reports and Related Auditor Responsibilities

At its open meeting on August 13, 2013, the Public Company Accounting Oversight Board proposed two new auditing standards that would significantly affect the role auditors play in providing information about public companies to investors and other users of financial statements. The proposed standards are designed to provide more information about the audit, the auditor and the auditor’s responsibilities for other information in certain documents that include (or incorporate by reference) audited financial statements and the related auditor’s report.

We expect significant comments on the proposed standards, particularly with respect to the incremental risk of liability that both standards would impose on auditors, as well as whether the additional information to be included in the auditor’s report will provide commensurate value to investors and other users of the financial statements. Comments may also address how the proposed standards could affect relationships between a company’s auditor and its management or audit committee.