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Audit Standards — What is the PCAOB Planning for the Year Ahead?

Investigative & Forensic Accounting Blog

The Public Company Accounting Oversight Board (PCAOB) is an important player in the audit world. It sets quality-of-work standards that accountants are required to follow when auditing the financial statements of publicly traded companies. Its ultimate goal is to protect the interests of investors and other stakeholders.

Throughout the year, the PCAOB considers whether existing standards need to be tweaked, if new standards need to be created, or if new rules need to be implemented. And 2023 was a record-breaking year. The PCAOB took more action on standard setting and rulemaking than they have in any of the last 10 years. Let’s look at some of the biggest changes they proposed so that you know what to expect from your audits in 2024.

Standard-Setting Projects

This year, the PCAOB adopted one new standard and placed eight on its short list for projects to get passed in the next 12 months. Interestingly, the adopted standard and a handful of the proposed standards address the same issue: businesses’ use of technology. Let’s look at the adopted standard and see why technology changes are a common thread.

The new standard that was adopted in September 2023 pertains to audit confirmations. The prevailing standard was outdated; it was initially drafted over 30 years ago and has not been significantly amended since its adoption as a PCAOB’s standard in 2003. This means that the standard did not consider or address the use of electronic confirmations. Today, nearly all confirmations are sent and received electronically. The new standard does not create new rules for electronic confirmations, but rather it introduces principles-based requirements that can apply to all methods of communication, whether those are electronic or paper-based.

The eight proposed standard-setting projects — four of which are likely to be adopted in early 2024 — cover the following topics:

  • Quality control
  • Noncompliance with laws and regulations
  • Going concern
  • Performance metrics

Below is a summarized list of the PCAOB standard-setting projects that are likely to be adopted sometime in 2024.

PCAOB Short-Term Standard-Setting Projects

Adopted in 2023
Confirmation Modernize the use of confirmations to reflect new technology and align more closely with risk assessment standards.
Quality Control Consider how PCAOB quality control standards should be revised to enhance and strengthen firms’ quality control systems.
Noncompliance with Laws and Regulations Consider changes to an auditor’s consideration of possible noncompliance with laws and regulations including how current standards should be revised to integrate a scalable, risk-based approach that takes into account recent developments in corporate governance and internal control practices.

General Responsibilities of the Auditor in Conducting an Audit

Consider changes to auditing standards to modernize and clarify principles and responsibilities fundamental to the conduct of an audit.

Amendments Related to Aspects of Designing and Performing Audit Procedures that Involve Technology-Assisted Analysis of Information in Electronic Form Consider how PCAOB standards should be revised to address certain aspects of designing and performing audit procedures using technology-assisted analysis of digital information.
Attestation Standards Update Consider the requirements in the interim attestation standards in connection with the PCAOB’s interim standards project.
Proposed (Anticipated Adoption in 2024)
Going Concern Consider the auditor’s evaluation and reporting of a company’s ability to continue as a going concern in response to changes in financial reporting, the auditing environment, and stakeholder needs.
Firm and Engagement Performance Metrics Enhance information provided to investors at both the firm and engagement level.
Substantive Analytical Procedures Consider changes to an auditor’s use of substantive analytical procedures to better align with their risk assessment and to address the increasing use of technology in performing these procedures.

Rulemaking Projects

In addition to setting performance standards, the PCAOB establishes rules and disciplinary actions for audit firms. This year, a new rule was proposed covering contributory liability. It suggests that the person who contributes to the violation (1) be charged with “negligence” rather than “recklessness,” and (2) need not be associated with the firm that committed the primary violation. In other words, an auditor from another firm may be charged with contributory liability in the case of an audit gone wrong.

The proposed rule hasn’t been finalized; it’s currently in the hands of the public. Once the PCAOB closes the public comments period, it will review the rule again and adjust the rule based on the information gathered.

Below is a list of the proposed rules as of the end of 2023.

PCAOB Short-Term Rulemaking Projects

Contributory Liability

Consider changing the standard of conduct for associated persons’ contributory liability from recklessness” to “negligence,” and amending the rule so that a person contributing to the violation need not be associated with the firm that commits the primary violation.

Follow-on Disciplinary Proceedings

Consider expediting follow-on disciplinary proceedings against registered firms or associated persons who have been convicted of certain crimes or enjoined or sanctioned by a court or another regulator.

Firm Reporting & Transparency

Consider changes to audit firm reporting requirements including periodic reporting requirements, special reporting requirements, and other enhancements to the audit firm reporting framework.


Consider changes to enhance the PCAOB’s registration program.


The PCAOB wants to keep its audit and professional practice standard relevant, which is why this proposed standard-setting and rulemaking process is so important. The new standards and rules it approves can certainly affect your experience during your company’s annual audit. Your auditors should notify you of any significant changes to audit procedures in the planning phase, but if you have any questions at any time, feel free to contact us. Our team can discuss upcoming changes with you so you know what to expect.

Kelli is a Vice President in the Assurance Services Group and is a key member of the firm’s not-for-profit core group. She oversees the firm’s quality control procedures. In addition, she is involved with researching technical accounting issues.

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