1666 K Street, N.W. Washingtn, D.C. 20006 Telephne: (202) 207-9100 Facsimile: (202) 862-8430 www.pcabus.rg SUPPLEMENTAL REQUEST FOR COMMENT: PROPOSED FRAMEWORK FOR REORGANIZATION OF PCAOB AUDITING STANDARDS AND RELATED AMENDMENTS TO PCAOB AUDITING STANDARDS AND RULES ) ) ) ) ) ) ) ) PCAOB Release N. 2014-001 PCAOB Rulemaking Dcket Matter N. 40 Summary: Public Cmment: Bard Cntacts: The Public Cmpany Accunting Oversight Bard ("PCAOB" r "Bard") is issuing a supplemental request fr cmment n its prpsed framewrk fr rerganizatin f PCAOB auditing standards and related amendments t PCAOB auditing standards and rules and repening the cmment perid n the prpsed rerganizatin. This supplemental request fr cmment presents the prpsed amendments t implement the prpsed rerganizatin. In cnjunctin with this supplemental request fr cmment, the Bard als is releasing n its website a demnstratin versin f the rerganized auditing standards t facilitate review and cmment n the prpsed amendments. Interested persns may submit written cmments t the Bard. Such cmments shuld be sent t the Office f the Secretary, PCAOB, 1666 K Street, N.W., Washingtn, D.C. 20006-2803. Cmments als may be submitted via email t cmments@pcabus.rg r thrugh the Bard's website at http://www.pcabus.rg. All cmments shuld refer t PCAOB Rulemaking Dcket Matter N. 40 in the subject r reference line and shuld be received by the Bard n later than July 8, 2014. Martin F. Baumann, Chief Auditr (202/207-9192, baumannm@pcabus.rg); Keith Wilsn, Deputy Chief Auditr (202/207-9134, wilsnk@pcabus.rg); Greg Fletcher, Assciate Chief Auditr (202/207-9203, fletcherg@pcabus.rg); and Rbert Ravas, Assistant Chief Auditr (202/591-4306, ravasr@pcabus.rg). * * * * *
Page 2 I. Backgrund In 2013, the PCAOB prpsed a framewrk fr rerganizing its auditing standards. 1/ As discussed in that prpsal, PCAOB auditing standards currently cnsist f tw types f equally authritative auditing standards: (1) standards issued by the Bard and (2) preexisting standards adpted by the Bard n an interim transitinal basis. Each type f auditing standard has its wn rganizatinal structure. The prpsed rerganizatin f PCAOB auditing standards is intended t create a standardized rganizatinal structure f PCAOB auditing standards t enhance the usability f the standards and help users navigate the standards mre easily. This culd help auditrs find mre easily the relevant requirements in PCAOB standards fr a particular area f the audit, which in turn culd facilitate cmpliance with the standards. The prpsed rerganizatin als wuld help avid ptential cnfusin between the Bard's standards and thse f the Auditing Standards Bard f the American Institute f Certified Public Accuntants ("AICPA"), if the same reference is used fr different standards cvering different tpics. 2/ Finally, the prpsed rerganizatin framewrk is intended t prvide a structure fr updating PCAOB standards in the future in that new auditing standards adpted by the Bard are expected t be issued in the frm f amended r new sectins f the rerganized standards rather than sequentially numbered standards. The prpsing release set frth a framewrk fr rerdering and renumbering the PCAOB's existing auditing standards in their entirety, withut redrafting the standards, impsing new requirements n auditrs, r making substantive changes t the requirements. The prpsing release als presented certain amendments t PCAOB auditing standards and rules related t the prpsed rerganizatin, including amendments t rescind certain interim auditing standards that the Bard believes are n lnger necessary. 1/ See Prpsed Framewrk fr Rerganizatin f PCAOB Auditing Standards and Related Amendments t PCAOB Auditing Standards and Rules, PCAOB Release N. 2013-002 (March 26, 2013) ("prpsing release"). 2/ Fr example, the PCAOB's interim auditing standard AU sectin ("sec.") 230, Due Prfessinal Care in the Perfrmance f Wrk, describes the auditr's respnsibilities fr applying due prfessinal care in planning and perfrming audits, whereas, the ASB's auditing standard with the same reference number relates t audit dcumentatin.
Page 3 In the prpsing release, the Bard stated that it intended t release and seek public cmment n all f the amendments necessary t implement the rerganizatin f the auditing standards. The Bard als indicated its intentin t prvide a functining nline versin f the rerganized auditing standards t facilitate review f the prpsed amendments. This supplemental request fr cmment presents all f the implementing amendments and prvides infrmatin n accessing the nline demnstratin versin f the rerganized auditing standards. In cnjunctin with develping the implementing amendments, the Bard als identified certain refinements t the initially prpsed rerganizatin framewrk and certain technical changes t PCAOB standards, which are discussed in Sectin II. The prpsed amendments in this release reflect thse refinements and include the additinal technical changes. In cnjunctin with issuing this supplemental request fr cmment, the Bard is repening the cmment perid and renewing its request fr cmments. In additin, the Bard cntinues t evaluate the cmments received previusly, as discussed in Sectin I.A. T facilitate review and cmment n the prpsed amendments, the Bard als is releasing n its website a demnstratin versin f the rerganized auditing standards, which presents the Bard's existing auditing standards as they wuld lk if rerganized under the prpsed framewrk and prpsed amendments. 3/ A. Cmments n the Prpsing Release The Bard has received 19 cmment letters in respnse t the prpsing release. 4/ The Bard cntinues t cnsider thse cmments and will cnsider additinal cmments received in respnse t this supplemental request fr cmment. If, after cnsideratin f cmments, the Bard decides t adpt the rerganizatin, the accmpanying release will mre fully discuss the Bard's respnses t cmments received n the prpsed rerganizatin. This sectin prvides infrmatin abut certain cmments received t date, in rder t aid ptential cmmenters n this supplemental request fr cmment. 3/ The demnstratin versin f the rerganized auditing standards can be accessed at http://pcabus.rg/rules/rulemaking/pages/dcket040.aspx. The demnstratin versin includes an email link that allws individuals t cmment n any aspect f the prpsed rerganizatin while reviewing the demnstratin versin. 4/ Cmment letters n the prpsal are available n the Bard's website.
Page 4 Cmments, in general, indicated supprt fr the prpsed rerganizatin f the PCAOB auditing standards. Sme cmmenters made statements abut the standardsetting prcess mre generally, such as that the Bard shuld defer the rerganizatin t devte mre time t ther standard-setting prjects, cnverge with the auditing standards f the Internatinal Auditing and Assurance Standards Bard, r cllabrate with ther auditing standard setters n develping a unified framewrk fr auditing standards. Varius cmmenters suggested a variety f individual changes t the titles, rder, grupings, r numbering sequence f the rerganizatin framewrk. Fr example, changes suggested by cmmenters include (1) reclassifying certain auditing standards within the prpsed framewrk, (2) cmbining certain categries r subcategries in the prpsed framewrk, and (3) creating certain new categries r subcategries. Hwever, there was little cmmnality amng the suggested changes. The Bard als received cmments regarding its plans t rescind certain standards that it believes are n lnger necessary. 5/ Sme cmmenters suggested ther standards that culd be rescinded r suggested retaining ne r mre f the standards, including AU sec. 532. Regarding AU sec. 532, sme cmmenters suggested that auditrs smetimes need t restrict the use f their reprts, and they cited examples f situatins cvered by ther standards that the Bard is prpsing t retain. 6/ The Bard requests specific examples f situatins, ther than thse cvered by ther PCAOB standards, fr which rescinding AU sec. 532 wuld result in an inapprpriate utcme. While the Bard cntinues t evaluate the cmments received t date, the Bard is issuing this supplemental request fr cmment cntaining the implementing amendments fr the rerganizatin as initially prpsed, except fr certain refinements described in Sectin II. The issuance f this supplemental request fr cmment shuld 5/ Thse standards are AU sec. 150, Generally Accepted Auditing Standards, AU sec. 201, Nature f the General Standards, AU sec. 410, Adherence t Generally Accepted Accunting Principles, AU sec. 532, Restricting the Use f an Auditr's Reprt, and AU sec. 901, Public Warehuses Cntrls and Auditing Prcedures fr Gds Held. 6/ Specifically, cmmenters cited situatins cvered by AU sec. 325, Cmmunicatins Abut Cntrl Deficiencies in an Audit f Financial Statements, and AU sec. 623, Special Reprts. Cmmenters als cited Auditing Standard N. 16, Cmmunicatins with Audit Cmmittees, but that standard, by its terms, des nt require the auditr t restrict the use f audit cmmittee cmmunicatins.
Page 5 nt be cnstrued as reflecting the Bard's cmplete and final cnsideratin f any particular cmment. II. Prpsed Amendments A. Overview f Prpsed Amendments Appendix 4 presents the prpsed amendments t PCAOB auditing standards and rules t implement the prpsed rerganizatin, including changes t update the sectin numbers and crss-references in the standards. The prpsed amendments in Appendix 4 als include certain amendments discussed in the prpsing release, which generally related t rescinding certain auditing standards (as discussed in Sectin I.A.), deleting certain appendices and exhibits t the interim auditing standards, 7/ and related changes t PCAOB Rule 3101, Certain Terms Used in Auditing and Related Prfessinal Practice Standards, and Rule 3200T, Interim Auditing Standards. These amendments are carried frward in this supplemental request fr cmment largely as prpsed, allwing cmmenters t review all f the prpsed amendments in ne dcument. 8/ In cnjunctin with develping the prpsed amendments, the Bard has identified certain refinements t the prpsed rerganizatin framewrk and certain technical changes t PCAOB standards that are intended t further the bjective f enhancing the usability f the auditing standards. These refinements and amendments are nt expected t impse new requirements n auditrs r change the substance f the requirements fr perfrming and reprting n audits under PCAOB standards. These prpsed refinements and changes are discussed in Sectin II.B. and are reflected in the appendices t this release. 7/ The term "interim auditing standards" refers t the auditing standards f the AICPA adpted by the Bard as f April 16, 2003, t the extent nt superseded r amended by the Bard. 8/ In sme cases, the amendments in Appendix 4 are updated versins f amendments in the prpsing release, as discussed further in Sectin II.B. f this release.
Page 6 B. Refinements t the Rerganizatin Framewrk and Other Changes The prpsed amendments in Appendix 4 reflect certain refinements t the prpsed rerganizatin framewrk in Appendix 1 t the prpsing release 9/ and certain ther technical changes t PCAOB standards, as fllws: Changes t the titles f certain auditing standards and subcategries t: (1) prmte mre cnsistency in the styling f standards r (2) clarify the subject f the standard. 10/ In additin, the title f subcategry 2700 is changed frm "Auditr's Respnsibilities Regarding Other Infrmatin" t "Auditr's Respnsibilities Regarding Supplementary and Other Infrmatin" t clarify the tpics f the standards within this subcategry. Expansin f the numbering interval within subcategries t allw mre flexibility fr future standards. Fr example, in the prpsed rerganizatin framewrk, standards that were numbered cnsecutively within the furdigit numbering structure are nw prpsed t be renumbered using increments f five. 11/ 9/ Appendix 1 t this release presents the revised prpsed rerganizatin framewrk, and the prpsed titles, numbering, and categrizatin f standards. 10/ The prpsed rerganizatin in Appendix 1 reflects the fllwing changes t auditing standard titles t make them mre cnsistent in style with ther standards: (1) remving the phrase "The Auditr's" frm AS 2415, The Auditr's Cnsideratin f an Entity's Ability t Cntinue as a Ging Cncern; (2) adding the term "Auditing" t AS 2510, Inventries; (3) adding the phrase "Cnsideratin f an Entity's Use f" t AS 2601, Service Organizatins; and (4) remving the phrases "The Auditr's" and "in an Audit f Financial Statements" frm AS 2605, The Auditr's Cnsideratin f the Internal Audit Functin in an Audit f Financial Statements. The prpsed rerganizatin als reflects a change t add the phrase "Initial Audits" t AS 2610, Cmmunicatins Between Predecessr and Successr Auditrs t clarify the subject f the standard. 11/ The prpsed amendments wuld nt adjust the interval between AS 2501, Auditing Accunting Estimates, AS 2502, Auditing Fair Value Measurements and Disclsures, and AS 2503, Auditing Derivative Instruments, Hedging Activities, and Investments in Securities, as the Bard has a standard-setting prject that is, amng ther things, cnsidering a cmbined standard t include the tpics addressed by these standards.
Page 7 Rerdering f the subcategry "Auditing Internal Cntrl Over Financial Reprting" t fllw the subcategry "Audit Planning and Risk Assessment," as this sequence is a clearer representatin f the integrated audit prcess. Mvement f Auditing Standard N. 4, Reprting n Whether a Previusly Reprted Material Weakness Cntinues t Exist, frm AS 2302 in the "Audit Prcedures" categry, as initially prpsed, t AS 6115 in the "Other Matters Assciated with Audits" categry as this categry describes mre clearly the nature f the wrk cvered by this standard. 12/ Replacement f references t generally accepted auditing standards ("GAAS") thrughut the auditing standards with references t the standards f the PCAOB r PCAOB auditing standards, and, as a result, superseding Auditing Standard N. 1, References in Auditrs' Reprts t the Standards f the Public Cmpany Accunting Oversight Bard. 13/ Eliminating certain inperative language in auditing standards and interpretatins and eliminating inperative references t AICPA standards r rules, such as the prvisins f the AICPA Cde f Prfessinal Cnduct r ethics rules that were nt adpted as interim standards f the PCAOB, and replacing thse references t AICPA standards with references t PCAOB standards, where apprpriate. 14/ 12/ Separately, the prpsed rerganizatin in Appendix 1 als reflects the renumbering f AU sec. 504, Assciatin With Financial Statements, frm AS 3301 t AS 3320, while maintaining that standard in the same subcategry as initially prpsed. 13/ This standard prvides that, whenever the auditr is required by existing standards t reference GAAS in a reprt, the auditr must instead refer t the standards f the PCAOB. Auditing Standard N. 1 als includes a requirement fr the reprt t include the city and state, r cuntry, f the auditr. If Auditing Standard N. 1 is superseded, that requirement wuld be added t the Bard's ther standards n auditr reprting. Als, since Auditing Standard N. 1 applies t reprts issued pursuant t the PCAOB's attestatin standards, the Bard is prpsing t make analgus changes t the interim attestatin standards. See Appendix 4 fr the prpsed amendments. 14/ Fr example, the Bard is prpsing t delete frm AS 1005, Independence, and AS 2605 references t AICPA independence requirements that were never adpted by the Bard. Similar types f changes were made t AS 2705, Unaudited Supplementary Infrmatin Included in Audited Financial Statements, AS
Page 8 III. Next Steps After cnsidering cmments received n the prpsing release and the supplemental request fr cmment, the Bard will determine whether, r in what frm, t adpt and implement the framewrk fr the PCAOB's rerganized auditing standards. The Bard may undertake future phases f the rerganizatin prject that build n the imprvements frm the initial phase t prvide further benefits. Such phases culd include, fr example, addressing utdated references t generally accepted accunting principles. Anther phase might address ptential rerganizatin f cntent in existing standards. Fr example, standards that cver multiple aspects f the audit culd be disaggregated and tpics mved t ther sectins t further align with the flw f the audit prcess. Other pssible phases may include rerganizatin f ther PCAOB standards r rerganizatin f staff guidance. IV. Ecnmic Cnsideratins and Applicatin t Audits f Emerging Grwth Cmpanies As discussed in the prpsing release, the prpsed rerganizatin is intended t create a standardized rganizatinal structure f PCAOB auditing standards t enhance the usability f the standards and help users navigate the standards mre easily. As previusly discussed, this culd help auditrs find mre easily the relevant requirements in PCAOB standards fr a particular area f the audit, which culd facilitate cmpliance with PCAOB standards. The prpsing release nted that the prpsed rerganizatin was nt expected t increase csts ther than ne-time csts t registered firms f updating references within firm methdlgies, related reference materials, and practice aids t reflect the new citatins t PCAOB auditing standards. The prpsing release als nted that these cst cnsideratins are nt expected t be different fr audits f emerging grwth 6101, Letters fr Underwriters and Certain Other Requesting Parties, AS 6105, Reprts n the Applicatin f Accunting Principles, AI 24, Special Reprts: Auditing Interpretatins f AS 3305, and AI 25, Assciatin with Financial Statements: Auditing Interpretatins f AS 3320. The Bard als is prpsing t remve references t superseded standards in AS 3305, Special Reprts, AS 4105, Reviews f Interim Financial Infrmatin, AI 23, Reprts n Audited Financial Statements: Auditing Interpretatins f AS 3101, AI 24, Special Reprts: Auditing Interpretatins f AS 3305, AT Sectin 701, Management's Discussin and Analysis, AT Sectin 9101, Attest Engagements: Attest Engagements Interpretatins f Sectin 101, and ET Sectin 101, Independence.
Page 9 cmpanies ("EGCs"), as defined by the Jumpstart Our Business Startups Act ("JOBS Act"). Nne f the prpsed amendments in this supplemental request fr cmment, including the refinements t thse presented in the prpsing release, are expected t change the ecnmic cnsideratins discussed in the prpsing release. The Bard cntinues t seek cmment n any ecnmic cnsideratins assciated with the prpsed rerganizatin including fr audits f EGCs whether it is "necessary r apprpriate in the public interest, after cnsidering the prtectin f investrs, and whether the actin will prmte efficiency, cmpetitin, and capital frmatin." 15/ V. Opprtunity fr Public Cmment The Bard has repened the cmment perid fr 60 days t seek cmment n the matters discussed in the prpsing release and the implementing amendments in Appendix 4. 16/ Interested persns are encuraged t submit their views t the Bard. Written cmments shuld be sent t the Office f the Secretary, PCAOB, 1666 K Street, N.W., Washingtn, D.C. 20006-2803. Cmments als may be submitted by email t cmments@pcabus.rg r thrugh the Bard's website at http://www.pcabus.rg. All cmments shuld refer t PCAOB Rulemaking Dcket Matter N. 40 in the subject r reference line and shuld be received by the Bard n later than July 8, 2014. * * * 15/ Pub. L. N. 112-106 (April 5, 2012). See Sectin 103(a)(3)(C) f the Sarbanes-Oxley Act f 2002, (15 U.S.C. 7213(a)(3)), as added by Sectin 104 f the JOBS Act. 16/ See pages 17 and 18 f the prpsing release fr questins related t the prpsed rerganizatin f PCAOB auditing standards.
Page 10 On the 7 th day f May, in the year 2014, the freging was, in accrdance with the bylaws f the Public Cmpany Accunting Oversight Bard, ADOPTED BY THE BOARD. /s/ Phebe W. Brwn Phebe W. Brwn Secretary APPENDIX 1 Prpsed Framewrk fr Rerganizatin f PCAOB Auditing Standards APPENDIX 2 Cmparisn f Existing PCAOB Auditing Standards t Prpsed Framewrk fr Rerganizatin f PCAOB Auditing Standards APPENDIX 3 Cmparisn f Prpsed Framewrk fr Rerganizatin f PCAOB Auditing Standards t Existing PCAOB Auditing Standards and the Standards f the Internatinal Auditing and Assurance Standards Bard and Auditing Standards Bard APPENDIX 4 Prpsed Amendments t PCAOB Rules and Standards
Appendix 1 Prpsed Framewrk Page A1 1 Appendix 1 Prpsed Framewrk fr Rerganizatin f PCAOB Auditing Standards 1/ General Auditing Standards 1000 General Principles and Respnsibilities 1001 Respnsibilities and Functins f the Independent Auditr 1005 Independence 1010 Training and Prficiency f the Independent Auditr 1015 Due Prfessinal Care in the Perfrmance f Wrk 1100 General Cncepts 1101 Audit Risk 1105 Audit Evidence 1110 Relatinship f Auditing Standards t Quality Cntrl Standards 2/ 1200 General Activities 1201 Supervisin f the Audit Engagement 1205 Part f the Audit Perfrmed by Other Independent Auditrs 1210 Using the Wrk f a Specialist 1/ The PCAOB's website has a demnstratin versin f the auditing standards, rerganized pursuant t this supplemental request fr cmment. The demnstratin versin can be accessed at http://pcabus.rg/rules/rulemaking/pages/dcket040.aspx. 2/ AU sec. 161 is currently entitled, The Relatinship f Generally Accepted Auditing Standards t Quality Cntrl Standards. The Bard prpses t amend the title f this standard t make it mre cnsistent in style with ther standards withut changing its substance.
Appendix 1 Prpsed Framewrk Page A1 2 1215 Audit Dcumentatin 1220 Engagement Quality Review 1300 Auditr Cmmunicatins 1301 Cmmunicatins with Audit Cmmittees 1305 Cmmunicatins Abut Cntrl Deficiencies in an Audit f Financial Statements Audit Prcedures 2100 Audit Planning and Risk Assessment 2101 Audit Planning 2105 Cnsideratin f Materiality in Planning and Perfrming an Audit 2110 Identifying and Assessing Risks f Material Misstatement 2200 Auditing Internal Cntrl Over Financial Reprting 2201 An Audit f Internal Cntrl Over Financial Reprting That Is Integrated with An Audit f Financial Statements 2300 Audit Prcedures in Respnse t Risks Nature, Timing, and Extent 2301 The Auditr's Respnses t the Risks f Material Misstatement 2305 Substantive Analytical Prcedures 2310 The Cnfirmatin Prcess 2315 Audit Sampling 2400 Audit Prcedures fr Specific Aspects f the Audit 2401 Cnsideratin f Fraud in a Financial Statement Audit 2405 Illegal Acts by Clients
Appendix 1 Prpsed Framewrk Page A1 3 2410 Related Parties 2415 Cnsideratin f an Entity's Ability t Cntinue as a Ging Cncern 3/ 2500 Audit Prcedures fr Certain Accunts r Disclsures 2501 Auditing Accunting Estimates 2502 Auditing Fair Value Measurements and Disclsures 2503 Auditing Derivative Instruments, Hedging Activities, and Investments in Securities 2505 Inquiry f a Client's Lawyer Cncerning Litigatin, Claims, and Assessments 2510 Auditing Inventries 4/ 2600 Special Tpics 2601 Cnsideratin f an Entity's Use f a Service Organizatin 5/ 2605 Cnsideratin f the Internal Audit Functin 6/ 3/ AU sec. 341 is currently entitled, The Auditr's Cnsideratin f an Entity's Ability t Cntinue as a Ging Cncern. The Bard prpses t amend the title f this standard t make it mre cnsistent in style with ther standards withut changing its substance. 4/ AU sec. 331 is currently entitled, Inventries. The Bard prpses t amend the title f this standard t make it mre cnsistent in style with ther standards withut changing its substance. 5/ AU sec. 324 is currently entitled, Service Organizatins. The Bard prpses t amend the title f this standard t make it mre cnsistent in style with ther standards withut changing its substance. 6/ AU sec. 322 is currently entitled, The Auditr's Cnsideratin f the Internal Audit Functin in an Audit f Financial Statements. The Bard prpses t amend the title f this standard t make it mre cnsistent in style with ther standards withut changing its substance.
Appendix 1 Prpsed Framewrk Page A1 4 2610 Initial Audits Cmmunicatins Between Predecessr and Successr Auditrs 7/ 2700 Auditr's Respnsibilities Regarding Supplementary and Other Infrmatin 8/ 2701 Auditing Supplemental Infrmatin Accmpanying Audited Financial Statements 9/ 2705 Unaudited Supplementary Infrmatin Included in Audited Financial Statements 10/ 2710 Other Infrmatin in Dcuments Cntaining Audited Financial Statements 11/ 2800 Cncluding Audit Prcedures 2801 Subsequent Events 7/ AU sec. 315 is currently entitled, Cmmunicatins Between Predecessr and Successr Auditrs. The Bard prpses t amend the title f this standard t clarify the subject f the standard withut changing its substance. 8/ The title f this subcategry has been changed frm "Auditr's Respnsibilities Regarding Other Infrmatin" in the prpsing release t clarify the tpics f the standards within this subcategry. 9/ Since the prpsing release f the rerganizatin framewrk, the Bard has adpted, and the SEC has apprved, Auditing Standard N. 17, Auditing Supplemental Infrmatin Accmpanying Audited Financial Statements, which superseded AU sec. 551. See PCAOB Release N. 2013-008 (Octber 10, 2013). The title f this sectin has been updated t cnfrm t the title f Auditing Standard N. 17. 10/ AU sec. 558 is currently entitled, Required Supplementary Infrmatin. The Bard prpses t amend the title f this standard t distinguish it mre clearly frm Auditing Standard N. 17 withut changing the substance f the standard. 11/ The Bard has prpsed a new auditing standard, The Auditr's Respnsibilities Regarding Other Infrmatin in Certain Dcuments Cntaining Audited Financial Statements and the Related Auditr's Reprt. See PCAOB Release N. 2013-005 (August 13, 2013). If adpted by the Bard and apprved by the SEC, that prpsed standard wuld becme AS 2710.
Appendix 1 Prpsed Framewrk Page A1 5 2805 Management Representatins 2810 Evaluating Audit Results 2815 The Meaning f "Present Fairly in Cnfrmity with Generally Accepted Accunting Principles" 2820 Evaluating Cnsistency f Financial Statements 2900 Pst-Audit Matters 2901 Cnsideratin f Omitted Prcedures After the Reprt Date 2905 Subsequent Discvery f Facts Existing at the Date f the Auditr's Reprt Auditr Reprting 3100 Reprting n Audits f Financial Statements 3101 Reprts n Audited Financial Statements 12/ 3105 Dating f the Independent Auditr's Reprt 3200 Reserved 3300 Other Reprting Tpics 3305 Special Reprts 12/ The Bard has prpsed a new auditing standard, The Auditr's Reprt n an Audit f Financial Statements When the Auditr Expresses an Unqualified Opinin and amendments t AU sec. 508. See PCAOB Release N. 2013-005 (August 13, 2013). If adpted by the Bard and apprved by the SEC, that prpsed standard wuld becme AS 3101. In additin, the frmer AU sec. 508 wuld becme AS 3105, Departures frm Unqualified Opinins and Other Reprting Circumstances, and AS 3105, Dating f the Independent Auditr's Reprt, wuld becme AS 3110.
3310 Special Reprts n Regulated Cmpanies 13/ PCAOB Release N. 2014-001 Appendix 1 Prpsed Framewrk Page A1 6 3315 Reprting n Cndensed Financial Statements and Selected Financial Data 3320 Assciatin with Financial Statements Matters Relating t Filings Under Federal Securities Laws 4101 Respnsibilities Regarding Filings Under Federal Securities Statutes 14/ 4105 Reviews f Interim Financial Infrmatin 15/ 5000 Reserved Other Matters Assciated with Audits 6101 Letters fr Underwriters and Certain Other Requesting Parties 6105 Reprts n the Applicatin f Accunting Principles 6110 Cmpliance Auditing Cnsideratins in Audits f Recipients f Gvernmental Financial Assistance 16/ 6115 Reprting n Whether a Previusly Reprted Material Weakness Cntinues t Exist 13/ AU sec. 544 is currently entitled, Lack f Cnfrmity With Generally Accepted Accunting Principles. The Bard prpses t amend the title f this standard t clarify the subject f the standard withut changing its substance. 14/ AU sec. 711 is currently entitled, Filings Under Federal Securities Statutes. The Bard prpses t amend the title f this standard t clarify the subject f the standard withut changing its substance. 15/ AU sec. 722 is currently entitled, Interim Financial Infrmatin. The Bard prpses t amend the title f this standard t clarify the subject f the standard withut changing its substance. 16/ AU sec. 801 is currently entitled, Cmpliance Auditing Cnsideratins in Audits f Gvernmental Entities and Recipients f Gvernmental Financial Assistance. The Bard prpses t amend the title f this standard t clarify the subject f the standard withut changing its substance.
Appendix 2 Cmparisn Page A2 1 Appendix 2 Cmparisn f Existing PCAOB Auditing Standards t Prpsed Framewrk fr Rerganizatin f PCAOB Auditing Standards This appendix presents the existing PCAOB auditing standards ("AS N." r "AU sec.") alng with their respective AS reference under the prpsed framewrk fr rerganizatin f PCAOB auditing standards. Fr the cnvenience f readers we have carried frward this appendix frm the prpsing release, 1/ updated fr certain changes discussed in Sectin II.B. t this release. Standards that nte "Rescind" in the Prpsed AS Reference clumn are existing standards that the Bard prpses t rescind in cnjunctin with the prpsed rerganizatin. Current PCAOB Reference (AU sectin r AS N.) AS N. 1 Current Title References in Auditrs' Reprts t the Standards f the Public Cmpany Accunting Oversight Bard Prpsed AS Reference Supersede 2/ AS N. 3 Audit Dcumentatin 1215 AS N. 4 AS N. 5 Reprting n Whether a Previusly Reprted Material Weakness Cntinues t Exist An Audit f Internal Cntrl Over Financial Reprting That Is Integrated with An Audit f Financial Statements 6115 2201 AS N. 6 Evaluating Cnsistency f Financial Statements 2820 1/ See Prpsed Framewrk fr Rerganizatin f PCAOB Auditing Standards and Related Amendments t PCAOB Auditing Standards and Rules, PCAOB Release N. 2013-002 (March 26, 2013). 2/ Auditing Standard N. 1 wuld be superseded as a result f the prpsed amendments made t ther standards.
Appendix 2 Cmparisn Page A2 2 Current PCAOB Reference (AU sectin r AS N.) Current Title Prpsed AS Reference AS N. 7 Engagement Quality Review 1220 AS N. 8 Audit Risk 1101 AS N. 9 Audit Planning 2101 AS N. 10 Supervisin f the Audit Engagement 1201 AS N. 11 AS N. 12 AS N. 13 Cnsideratin f Materiality in Planning and Perfrming an Audit Identifying and Assessing Risks f Material Misstatement The Auditr's Respnses t the Risks f Material Misstatement 2105 2110 2301 AS N. 14 Evaluating Audit Results 2810 AS N. 15 Audit Evidence 1105 AS N. 16 Cmmunicatins with Audit Cmmittees 1301 AS N. 17 AU sec. 110 Auditing Supplemental Infrmatin Accmpanying Audited Financial Statements Respnsibilities and Functins f the Independent Auditr 2701 1001 AU sec. 150 Generally Accepted Auditing Standards Rescind AU sec. 161 The Relatinship f Generally Accepted Auditing Standards t Quality Cntrl Standards 1110
Appendix 2 Cmparisn Page A2 3 Current PCAOB Reference (AU sectin r AS N.) Current Title Prpsed AS Reference AU sec. 201 Nature f the General Standards Rescind AU sec. 210 Training and Prficiency f the Independent Auditr 1010 AU sec. 220 Independence 1005 AU sec. 230 Due Prfessinal Care in the Perfrmance f Wrk 1015 AU sec. 315 Cmmunicatins Between Predecessr and Successr Auditrs 2610 AU sec. 316 Cnsideratin f Fraud in a Financial Statement Audit 2401 AU sec. 317 Illegal Acts by Clients 2405 AU sec. 322 The Auditr's Cnsideratin f the Internal Audit Functin in an Audit f Financial Statements 2605 AU sec. 324 Service Organizatins 2601 AU sec. 325 Cmmunicatins Abut Cntrl Deficiencies in an Audit f Financial Statements 1305 AU sec. 328 Auditing Fair Value Measurements and Disclsures 2502 AU sec. 329 Substantive Analytical Prcedures 2305 AU sec. 330 The Cnfirmatin Prcess 2310 AU sec. 331 Inventries 2510 AU sec. 332 Auditing Derivative Instruments, Hedging Activities, and Investments in Securities 2503
Appendix 2 Cmparisn Page A2 4 Current PCAOB Reference (AU sectin r AS N.) Current Title Prpsed AS Reference AU sec. 333 Management Representatins 2805 AU sec. 334 Related Parties 2410 AU sec. 336 Using the Wrk f a Specialist 1210 AU sec. 337 AU sec. 341 Inquiry f a Client's Lawyer Cncerning Litigatin, Claims, and Assessments The Auditr's Cnsideratin f an Entity's Ability t Cntinue as a Ging Cncern 2505 2415 AU sec. 342 Auditing Accunting Estimates 2501 AU sec. 350 Audit Sampling 2315 AU sec. 390 AU sec. 410 AU sec. 411 Cnsideratin f Omitted Prcedures After the Reprt Date Adherence t Generally Accepted Accunting Principles The Meaning f Present Fairly in Cnfrmity With Generally Accepted Accunting Principles 2901 Rescind 2815 AU sec. 504 Assciatin With Financial Statements 3320 AU sec. 508 Reprts n Audited Financial Statements 3101 AU sec. 530 Dating f the Independent Auditr's Reprt 3105 AU sec. 532 Restricting the Use f an Auditr's Reprt Rescind AU sec. 534 Reprting n Financial Statements Prepared fr Use in Nt Included
Appendix 2 Cmparisn Page A2 5 Current PCAOB Reference (AU sectin r AS N.) Other Cuntries Current Title Prpsed AS Reference AU sec. 543 Part f Audit Perfrmed by Other Independent Auditrs 1205 AU sec. 544 AU sec. 550 AU sec. 552 Lack f Cnfrmity With Generally Accepted Accunting Principles Other Infrmatin in Dcuments Cntaining Audited Financial Statements Reprting n Cndensed Financial Statements and Selected Financial Data 3310 2710 3315 AU sec. 558 Required Supplementary Infrmatin 2705 AU sec. 560 Subsequent Events 2801 AU sec. 561 Subsequent Discvery f Facts Existing at the Date f the Auditr's Reprt 2905 AU sec. 623 Special Reprts 3305 AU sec. 625 Reprts n the Applicatin f Accunting Principles 6105 AU sec. 634 Letters fr Underwriters and Certain Other Requesting Parties 6101 AU sec. 711 Filings Under Federal Securities Statutes 4101 AU sec. 722 Interim Financial Infrmatin 4105 AU sec. 801 Cmpliance Auditing Cnsideratins in Audits f Gvernmental Entities and Recipients f Gvernmental Financial Assistance 6110
Appendix 2 Cmparisn Page A2 6 Current PCAOB Reference (AU sectin r AS N.) AU sec. 901 Current Title Public Warehuses Cntrls and Auditing Prcedures fr Gds Held Prpsed AS Reference Rescind
Appendix 3 Cmparisn Page A3 1 Appendix 3 Cmparisn f Prpsed Framewrk fr Rerganizatin f PCAOB Auditing Standards t Existing PCAOB Auditing Standards and the Standards f the Internatinal Auditing and Assurance Standards Bard and Auditing Standards Bard This appendix presents the prpsed framewrk fr rerganizatin f PCAOB auditing standards ("AS") alng with their current references in existing PCAOB auditing standards and the analgus standards f the Internatinal Auditing and Assurance Standards Bard ("IAASB") and the Auditing Standards Bard f the American Institute f Certified Public Accuntants ("ASB"). Fr the cnvenience f readers we have carried frward this appendix frm the prpsing release, 1/ updated fr the changes discussed in Sectin II.B. t this release. Prpsed AS Reference Prpsed Title Current PCAOB Reference (AU sectin r AS N.) Analgus IAASB Standard (ISA) Analgus ASB Standard (AU-C) 1001 Respnsibilities and Functins f the Independent Auditr AU sec. 110 200 2/ 200 1005 Independence AU sec. 220 200 200 1010 Training and Prficiency f the Independent Auditr 1015 Due Prfessinal Care in the Perfrmance f Wrk AU sec. 210 200 200 AU sec. 230 200 200 1/ See Prpsed Framewrk fr Rerganizatin f PCAOB Auditing Standards and Related Amendments t PCAOB Auditing Standards and Rules, PCAOB Release N. 2013-002 (March 26, 2013). 2/ The respnsibilities, functins, training, and prficiency f the independent auditr; independence requirements; exercising due prfessinal care; and audit risk are included in multiple PCAOB standards (AS 1001, 1005, 1010, 1015, and 1101, respectively) but are included in ne IAASB standard (ISA 200) and ne ASB standard (AU-C 200).
Appendix 3 Cmparisn Page A3 2 Prpsed AS Reference Prpsed Title Current PCAOB Reference (AU sectin r AS N.) Analgus IAASB Standard (ISA) Analgus ASB Standard (AU-C) 1101 Audit Risk AS N. 8 200 200 1105 Audit Evidence AS N. 15 500 500 1110 Relatinship f Auditing Standards t Quality Cntrl Standards 1201 Supervisin f the Audit Engagement 1205 Part f the Audit Perfrmed by Other Independent Auditrs AU sec. 161 220 3/ 220 AS N. 10 220 220 AU sec. 543 600 600 1210 Using the Wrk f a Specialist AU sec. 336 620 620 1215 Audit Dcumentatin AS N. 3 230 230 1220 Engagement Quality Review AS N. 7 220 220 1301 Cmmunicatins with Audit Cmmittees AS N. 16 210, 260 4/ 210, 260 3/ The relatinship f auditing standards t quality cntrl standards, supervisin f the audit engagement, and engagement quality review are cvered in separate PCAOB standards (AS 1110, 1201, and 1220, respectively) but are included in ne IAASB standard (ISA 220) and ne ASB standard (AU-C 220). 4/ Under PCAOB standards, agreeing t the terms f an audit and cmmunicatins with audit cmmittees are cvered in ne standard, whereas thse subjects are cvered by separate standards under IAASB standards (ISA 210 and 260, respectively) and ASB standards (AU-C 210 and 260, respectively).
Appendix 3 Cmparisn Page A3 3 Prpsed AS Reference Prpsed Title Current PCAOB Reference (AU sectin r AS N.) Analgus IAASB Standard (ISA) Analgus ASB Standard (AU-C) 1305 Cmmunicatins Abut Cntrl Deficiencies in an Audit f Financial Statements AU sec. 325 265 265 2101 Audit Planning AS N. 9 300 300 2105 Cnsideratin f Materiality in Planning and Perfrming an Audit 2110 Identifying and Assessing Risks f Material Misstatement 2201 An Audit f Internal Cntrl Over Financial Reprting That Is Integrated with An Audit f Financial Statements 2301 The Auditr's Respnses t the Risks f Material Misstatement 2305 Substantive Analytical Prcedures AS N. 11 320 320 AS N. 12 315 315 AS N. 5 N/A 5/ AT 501 AS N. 13 330 330 AU sec. 329 520 6/ 520 5/ The PCAOB has a standard fr auditing internal cntrl ver financial reprting when auditing financial statements. The IAASB des nt have a standard n auditing internal cntrl ver financial reprting, and the ASB addresses that subject in its attestatin standards (AT 501). 6/ Under PCAOB standards, substantive analytical prcedures are cvered in a separate standard (AS 2305) and analytical prcedures perfrmed in the verall review are included in the standard n evaluating audit results (AS 2810), whereas thse subjects are bth included in ne IAASB standard (ISA 520) and ne ASB standard (AU-C 520).
Appendix 3 Cmparisn Page A3 4 Prpsed AS Reference Prpsed Title Current PCAOB Reference (AU sectin r AS N.) Analgus IAASB Standard (ISA) Analgus ASB Standard (AU-C) 2310 The Cnfirmatin Prcess AU sec. 330 505 505 2315 Audit Sampling AU sec. 350 530 530 2401 Cnsideratin f Fraud in a Financial Statement Audit AU sec. 316 240 240 2405 Illegal Acts by Clients AU sec. 317 250 250 2410 Related Parties AU sec. 334 550 550 2415 Cnsideratin f an Entity's Ability t Cntinue as a Ging Cncern AU sec. 341 570 570 2501 Auditing Accunting Estimates AU sec. 342 540 7/ 540 2502 Auditing Fair Value Measurements and Disclsures AU sec. 328 540 540 2503 Auditing Derivative Instruments, AU sec. 332 N/A 8/ 501 7/ The PCAOB has separate standards fr auditing accunting estimates (AS 2501) and auditing fair value measurements and disclsures (AS 2502), whereas the IAASB and ASB standards each have ne standard n auditing accunting estimates including fair value estimates and disclsures (ISA 540 and AU-C 540, respectively). 8/ The PCAOB has a separate standard fr auditing derivative instruments, hedging activities, and investments in securities (AS 2503). In ASB standards, that subject is included in the standard n specific cnsideratins regarding audit evidence (AU-C 501). The IAASB has a practice nte n auditing financial instruments but des nt have a standard n the subject.
Appendix 3 Cmparisn Page A3 5 Prpsed AS Reference Prpsed Title Current PCAOB Reference (AU sectin r AS N.) Analgus IAASB Standard (ISA) Analgus ASB Standard (AU-C) Hedging Activities, and Investments in Securities 2505 Inquiry f a Client's Lawyer Cncerning Litigatin, Claims, and Assessments AU sec. 337 501 9/ 501 2510 Auditing Inventries AU sec. 331 501 10/ 501 2601 Cnsideratin f an Entity's Use f a Service Organizatin 2605 Cnsideratin f the Internal Audit Functin 2610 Initial Audits Cmmunicatins Between Predecessr and Successr Auditrs 2701 Auditing Supplemental Infrmatin Accmpanying Audited Financial Statements 2705 Unaudited Supplementary Infrmatin Included in Audited Financial Statements AU sec. 324 402 402 AU sec. 322 610 610 AU sec. 315 510 510 AS N. 17 N/A 725 AU sec. 558 N/A 730 9/ The PCAOB has separate standards n inquiry f a client's lawyers (AS 2505) and auditing inventries (AS 2510). In IAASB and ASB standards, thse subjects are included in the standard n specific cnsideratins regarding audit evidence (ISA 501 and AU-C 501, respectively). 10/ Id.
Appendix 3 Cmparisn Page A3 6 Prpsed AS Reference Prpsed Title Current PCAOB Reference (AU sectin r AS N.) Analgus IAASB Standard (ISA) Analgus ASB Standard (AU-C) 2710 Other Infrmatin in Dcuments Cntaining Audited Financial Statements AU sec. 550 720 720 2801 Subsequent Events AU sec. 560 560 11/ 560 2805 Management Representatins AU sec. 333 580 580 2810 Evaluating Audit Results AS N. 14 240, 330, 240, 330, 450, 520 12/ 450, 520 2815 The Meaning f "Present Fairly in AU sec. 411 700 13/ 700 11/ In PCAOB standards, the subjects f subsequent events and subsequent discvery f facts existing at the reprt date are cvered by separate standards (AS 2801 and 2905, respectively). In IAASB and ASB standards, thse subjects are included in the standard n subsequent events (ISA 560 and AU-C 560, respectively). 12/ In PCAOB standards, the subject f evaluating audit results is cvered in ne standard (AS 2810). In IAASB and ASB standards, varius tpics related t evaluating audit results are cvered in multiple standards, particularly, the standards related t the auditr's respnsibilities regarding fraud, the auditr's respnses t assessed risks, evaluatin f misstatements, and analytical prcedures (ISA 240, 330, 450, and 520 and AU-C 240, 330, 450, and 520, respectively). 13/ The PCAOB has separate standards n the subjects f present fairly in cnfrmity with generally accepted accunting principles (AS 2815) and reprting n audited financial statements, including emphasis paragraphs, departures frm the standard pinin, and reprting n cmparative statements (AS 3101). In IAASB and ASB standards, the subject f presenting fairly is included in the standard n frming an pinin and reprting n audited financial statements (ISA 700 and AU-C 700, respectively), but there are separate standards fr emphasis paragraphs and departures frm the standard pinin (ISA 705 and 706, respectively, and AU-C 705 and 706, respectively). In IAASB standards, reprting n cmparative financial
Appendix 3 Cmparisn Page A3 7 Prpsed AS Reference Prpsed Title Current PCAOB Reference (AU sectin r AS N.) Analgus IAASB Standard (ISA) Analgus ASB Standard (AU-C) Cnfrmity with Generally Accepted Accunting Principles" 2820 Evaluating Cnsistency f Financial Statements 2901 Cnsideratin f Omitted Prcedures After the Reprt Date 2905 Subsequent Discvery f Facts Existing at the Date f the Auditr's Reprt AS N. 6 N/A 708 AU sec. 390 N/A 585 AU sec. 561 560 560 3101 Reprts n Audited Financial Statements AU sec. 508 700, 705, 706, 710 700, 705, 706 3105 Dating f the Independent Auditr's Reprt AU sec. 530 560, 700 14/ 560, 700 3305 Special Reprts AU sec. 623 800, 805 15/ 800, 805, 806 statements als is cvered in a separate standard (ISA 710), whereas that subject is included in the ASB standard n frming an pinin and reprting n audited financial statements (AU-C 700). 14/ Under PCAOB standards, the subject f dating the independent auditr's reprt is cvered in a single standard (AS 3105). Under IAASB and ASB standards, the standard requirement fr dating the auditr's reprt is cvered in the reprting standard (ISA 700 and AU-C 700, respectively), and the subject f dating the auditr's reprt when there is a subsequent discvery f facts is cvered in the subsequent events standard (ISA 560 and AU-C 560, respectively). 15/ Under PCAOB standards, financial statements prepared in accrdance with special purpse framewrks and reprting n specified elements, accunts r items f a financial statement are cvered in ne standard (AS 3305). Under IAASB and
Appendix 3 Cmparisn Page A3 8 Prpsed AS Reference Prpsed Title Current PCAOB Reference (AU sectin r AS N.) Analgus IAASB Standard (ISA) Analgus ASB Standard (AU-C) 3310 Special Reprts n Regulated Cmpanies 3315 Reprting n Cndensed Financial Statements and Selected Financial Data 3320 Assciatin with Financial Statements 4101 Respnsibilities Regarding Filings Under Federal Securities Statutes 4105 Reviews f Interim Financial Infrmatin AU sec. 544 210 16/ 800 AU sec. 552 810 810 AU sec. 504 N/A Withdrawn by ASB AU sec. 711 N/A 925 AU sec. 722 ISRE 2410 17/ 930 ASB standards, thse subjects are cvered by separate standards (ISA 800 and 805, respectively) and ASB standards (AU-C 800 and 805, respectively). Reprting n cmpliance with cntractual agreements r regulatry requirements in cnnectin with audited financial statements als is cvered by the PCAOB standard, whereas that subject is nt cvered by the IAASB standards and is cvered by a separate ASB standard (AU-C 806). 16/ Under PCAOB standards, the subject f reprting n financial statements prepared in accrdance with a regulatry basis f accunting is cvered in a separate standard (AS 3310). That subject is cvered in the IAASB standard n agreeing t the terms f audit engagements (ISA 210) and in the ASB standard n financial statements prepared in accrdance with special purpse framewrks (AU-C 800). 17/ In PCAOB standards, the subject f cnducting a review f interim financial infrmatin is cvered in AS 4105. Under IAASB standards, that subject is cvered in their review standards (ISRE 2410). Reviewing interim financial infrmatin is cvered by the ASB standards in AU-C 930.
Appendix 3 Cmparisn Page A3 9 Prpsed AS Reference Prpsed Title Current PCAOB Reference (AU sectin r AS N.) Analgus IAASB Standard (ISA) Analgus ASB Standard (AU-C) 6101 Letters fr Underwriters and Certain Other Requesting Parties 6105 Reprts n the Applicatin f Accunting Principles 6110 Cmpliance Auditing Cnsideratins in Audits f Recipients f Gvernmental Financial Assistance 6115 Reprting n Whether a Previusly Reprted Material Weakness Cntinues t Exist AU sec. 634 N/A 920 AU sec. 625 N/A 915 AU sec. 801 N/A 935 AS N. 4 N/A N/A
Page A4 1 Appendix 4 Prpsed Amendments t PCAOB Rules and Standards This appendix presents the prpsed amendments t implement the Bard's prpsed rerganizatin f PCAOB auditing standards and related changes t PCAOB rules and attestatin, quality cntrl, and ethics and independence standards. The PCAOB's website has a demnstratin versin f the rerganized auditing standards, as prpsed (with refinements described in this release), that can be accessed at http://pcabus.rg/rules/rulemaking/pages/dcket040.aspx. I. Prpsed Amendments t Rules f the Bard Rule 3101. Certain Terms Used in Auditing and Related Prfessinal Practice Standards Rule 3101. Certain Terms Used in Auditing and Related Prfessinal Practice Standards, is amended as fllws: In paragraph (b), the phrase "adpted in Rules 3200T, 3300T, 3400T, 3500T, and 3600T" is deleted. Rule 3200T. Interim Auditing Standards Rule 3200T. Interim Auditing Standards, is amended as fllws: The letter "T" is remved frm the reference t Rule 3200T. The wrd "Interim" is remved frm the title f the rule. The text f the rule is replaced with the fllwing: In cnnectin with the preparatin r issuance f any audit reprt, a registered public accunting firm and its assciated persns shall cmply with all applicable auditing standards adpted by the Bard and apprved by the SEC, including, t the extent nt superseded r amended by the Bard, AICPA Statements n Auditing Standards as in existence n April 16, 2003.
Page A4 2 II. Prpsed Amendments t PCAOB Standards Auditing Standards and Interpretatins Auditing Standard N. 1, References in Auditrs' Reprts t the Standards f the Public Cmpany Accunting Oversight Bard 1/ Auditing Standard N. 1, References in Auditrs' Reprts t the Standards f the Public Cmpany Accunting Oversight Bard, is superseded. Auditing Standard N. 3, Audit Dcumentatin Auditing Standard N. 3, Audit Dcumentatin, as amended, is amended as fllws: a. The sectin number "Auditing Standard N. 3" is replaced with "AS 1215." b. In the references befre paragraph 1, the phrase "[supersedes SAS N. 96, Audit Dcumentatin]" is deleted. c. Paragraph numbers 1 thrugh 21 are replaced with.01 thrugh.21. d. In ftnte 1 t paragraph 4, the reference t "paragraph 12" is replaced with "paragraph.12." e. In ftnte 2 t paragraph 6, the reference t "paragraphs 28 33 f Auditing Standard N. 5" is replaced with "paragraphs.28.33 f AS 2201." f. In paragraph 9: The parenthetic reference t "paragraph 15" is replaced with "paragraph.15." In the first bullet, the reference t "paragraph 16" is replaced with "paragraph.16." In the secnd bullet, the reference t "AU sec. 390" is replaced with "AS 2901." 1/ The captins in this sectin refer t the numbers and titles f the current PCAOB auditing standards and interpretatins.
Page A4 3 g. In ftnte 2A t paragraph 12a: The reference t "paragraphs 12 13 f Auditing Standard N. 12" is replaced with "paragraphs.12.13 f AS 2110." The reference t "AU sec. 316" is replaced with "AS 2401." h. In ftnte 2B t paragraph 12c, the reference t "paragraphs 10 23 f Auditing Standard N. 14" is replaced with "paragraphs.10.23 f AS 2810." i. In ftnte 2C t paragraph 12f: The reference t "paragraph 74 f Auditing Standard N. 12, Identifying and Assessing Risks f Material Misstatement," is replaced with "AS 2110.74." The reference t "paragraph 36 f Auditing Standard N. 14, Evaluating Audit Results" is replaced with "AS 2810.36." j. In the secnd sentence f paragraph 17, the reference t "AU sec. 711, Filings Under Federal Securities Statutes" is replaced with "AS 4101, Respnsibilities Regarding Filings Under Federal Securities Statutes." k. In the first sentence f paragraph 18, the reference t "paragraphs 4 13" is replaced with "paragraphs.04.13." l. In paragraph 19a, the reference t "paragraphs 12 and 13" is replaced with "paragraphs.12 and.13." m. In paragraph 19c, the reference t "paragraph 8" is replaced with "paragraph.08." n. In the last sentence f paragraph 19, the reference t "AU sec. 543, Part f Audit Perfrmed by Other Independent Auditrs," is replaced with "AS 1205, Part f the Audit Perfrmed by Other Independent Auditrs." Auditing Standard N. 4, Reprting n Whether a Previusly Reprted Material Weakness Cntinues t Exist Auditing Standard N. 4, Reprting n Whether a Previusly Reprted Material Weakness Cntinues t Exist, as amended, is amended as fllws: a. The sectin number "Auditing Standard N. 4" is replaced with "AS 6115."