Quality Control
Most Recent Action
On November 18, 2022, the Board voted to issue a proposal for a new QC standard, QC 1000, A Firm’s System of Quality Control (proposed QC 1000), together with related amendments to PCAOB rules, standards, and forms, for public comment. The comment period is open through February 1, 2023.
In brief, the Board’s proposal would:
- Provide an integrated, risk-based standard that includes establishing quality objectives, identifying and assessing quality risks to the achievement of the quality objectives, designing and implementing quality responses to address the quality risks, and monitoring the firm’s QC system, and that encourages an ongoing feedback loop to drive continuous improvement of the QC system.
- Require all registered firms to design a QC system that complies with QC 1000 and require firms that perform or have responsibilities with respect to engagements under PCAOB standards – for example, audit engagements for issuers or broker-dealers – to implement and operate their QC systems.
- Require involvement of independent individuals in firm governance for the largest firms.
- Provide specified requirements regarding firm technological resources.
- Provide objectives regarding a firm’s voluntary publication of firm and engagement performance metrics.
- Establish annual reporting requirements on QC – communication of the firm’s annual evaluation of QC system effectiveness to the audit committee of every issuer or broker-dealer client, and more detailed reporting to the PCAOB on a new, non-public reporting form, Form QC.
- Expand the auditor’s responsibility to respond to deficiencies on engagements under an amended and retitled AS 2901, Responding to Engagement Deficiencies After Issuance of the Auditor’s Report, and related amendments to our attestation standards for broker-dealer engagements.
- Establish a new standard, EI 1000, Integrity and Objectivity, to better align our ethics requirements with the scope, approach, and terminology of QC 1000.
- Make additional changes to PCAOB rules, standards, and forms.
Additional information on the proposal:
