The Public Company Accounting Oversight Board (PCAOB) provided an update on its inspections activities in light of the evolving COVID-19 crisis.
The PCAOB noted that the COVID-19 crisis presents a unique set of challenges for investors, issuers, broker-dealers, auditors, and regulators. In determining how best to shape the inspections program during this time of economic uncertainty and dislocation, the PCAOB is guided by two core considerations: (1) the health and safety of its employees and those with whom they interact; and (2) the PCAOB’s statutory mission to promote audit quality, including by conducting the inspections program.
The PCAOB decided to provide audit firms with an opportunity for relief from inspections. The PCAOB’s notice states:
“In balancing these considerations, we have made the decision to provide PCAOB-registered audit firms an up to 45-day relief period from inspections, with the exception of providing us access to audit documentation for certain engagements. Audit firms that wish to avail themselves of the 45-day relief period in full or in part should reach out to their designated inspections point of contact. We expect to fully resume inspections beginning May 11, 2020.”
This opportunity for a pause will give audit firms the time, resources, and flexibility to work through significant matters with their issuer and broker-dealer clients. At the same time, the PCAOB inspections staff can continue their important work by reviewing documentation for certain engagements remotely and preparing for inspections.
The PCAOB stated that it remains steadfast in its commitment to protect investors and the public interest by promoting informative, accurate, and independent audit reports. Audit firms’ adherence to PCAOB standards takes on added importance as investors depend now, more than ever, on the integrity of financial statements.
The PCAOB noted that it would continue to closely monitor the evolving situation and reassess its policies as appropriate. Those who have questions, comments, or concerns to share with the PCAOB are requested to visit the “Contact Us” page on its website to find the relevant PCAOB contact information.
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