Investor Protection

CFA Supports PCAOB Proposal to Strengthen Auditor Standards

CFA wrote in support of a proposal by the Public Company Accounting Oversight Board (PCAOB) regarding revisions to auditing standards related to an auditor’s responsibility for considering a company’s noncompliance with laws and regulations, including fraud, in an audit. The current standard is out of date and has long been identified by investors as one in need of revision. By strengthening auditor standards for identifying, evaluating, and communicating a company’s noncompliance with laws and regulations, the proposal should enhance audit quality, increase the likelihood that companies remedy any noncompliance in a timelier manner, and reduce the losses that investors suffer as a result of a company’s noncompliance with laws and regulations. These proposed changes should bring auditor practices more in line with investor expectations.