June 10, 2014

CAQ Statement on PCAOB Adoption of New Auditing Standard on Related Parties

Washington, DC – Center for Audit Quality Executive Director Cindy Fornelli made the following statement in response to the adoption by the Public Company Accounting Oversight Board (PCAOB) of a new auditing standard on related parties:

"The CAQ continues to support the PCAOB’s efforts to improve audit quality through strengthening the requirements relating to the auditor’s evaluation of a company’s identification of, accounting for, and disclosure of its relationships and transactions with related parties. 

We recognize the Board for its efforts throughout the process to examine the potential costs and benefits of the standard and implementation issues.

The CAQ believes that the final standard and amendments should be applicable to the audits of Emerging Growth Companies. This will avoid bifurcation of the rules applied to financial statement audits performed in accordance with PCAOB standards, which could be confusing to investors and other stakeholders."

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About the CAQ

The Center for Audit Quality (CAQ) is an autonomous, nonpartisan public policy organization dedicated to enhancing investor confidence and public trust in the global capital markets. The CAQ fosters high quality performance by public company auditors, convenes and collaborates with other stakeholders to advance the discussion of critical issues requiring action and intervention, and advocates policies and standards that promote public company auditors’ objectivity, effectiveness and responsiveness to dynamic market conditions. Based in Washington, DC, the CAQ is affiliated with the American Institute of Certified Public Accountants. For more information, visit www.thecaq.org.