The recently implemented Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 16, effective for audits of fiscal years beginning after December 15, 2012, brings change to communication between independent auditors and public company audit committee members. Changes include an emphasis on two-way communication and the timeliness of communication. The requirement is intended to help audit committees better understand the audit process and applicable results.
In the interview What Audit Committees Need to Know About Auditing Standard No. 16, Dale Jensen, partner-in-charge of Weaver’s public company audit practice, spoke with Smart Business about the implementation and how it affects the responsibilities of auditors. Dale addresses:
- How communication will change between auditors and audit committees
- If the standard specifies the type of communication required
- The overall impact of the standard
In general, the standard’s enhancement of two-way communication is expecting positive results, pending the specific company, issues at hand and how information has historically been disseminated between the auditor and audit committee.