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PCAOB says it's not ruling out modifications to existing standards.
Stephen Taub, CFO.com | US
February 16, 2006
The Securities and Exchange Commission and the Public Company Accounting Oversight Board (PCAOB) have announced they will co-host a roundtable discussion on May 10 to discuss second-year experiences of implementing the reporting and auditing requirements of Section 404 of the Sarbanes-Oxley Act. Section 404 deals specifically with a company's internal controls over financial reporting.
The roundtable participants will include issuers, auditors, investors, and other interested parties, according to the joint announcement. This is the SEC's second roundtable on the topic. "Last spring's informative roundtable resulted in valuable guidance," said SEC chairman Christopher Cox. The opinions and facts gleaned from the discussion will help the regulators develop policies to improve the reliability of financial statements, he noted.
"I am very much open to suggestions to make the internal control assessment process more efficient, including modifications of the PCAOB's auditing standard and other actions the Board could undertake," asserted PCAOB acting chairman Bill Gradison.
SEC roundtables are very rare; there have only been a handful in the past few years, including the one on Section 404. Other gatherings addressed the SEC's ill-fated proxy-access proposals and hedge funds, which resulted in increased regulation for the secretive industry. The SEC and PCAOB are also seeking written feedback from registrants, auditors, investors, and others about their experiences with complying with the Section 404 requirements in the first two years. The regulators are especially interested in how the efficiency and effectiveness of those assessments and audits could be improved.
The due date for public comment is May 1. The SEC stressed that it is not soliciting feedback on a particular set of inquiries; rather, the information that is submitted to either organization will become part of the public record of the Section 404 roundtable.