On May 24, 2007, the Public Company Accounting Oversight Board (PCAOB or the Board) adopted Auditing Standard No. 5 (AS 5), An Audit of Internal Control Over Financial Reporting That is Integrated with An Audit of Financial Statements, which supersedes PCAOB Auditing Standard No. 2. AS 5 establishes requirements and provides direction to auditors engaged to perform an audit of management's assessment on the effectiveness of internal control over financial reporting (ICFR) that is integrated with an audit of the financial statements.
AS 5 is principles-based and is designed to increase the likelihood that material weaknesses in internal control will be found before they result in material misstatement of a company’s financial statements, and, at the same time, eliminate procedures that are unnecessary. The standard also focuses the auditor on the procedures necessary to perform a high quality audit that is tailored to the company’s facts and circumstances.
AS 5 is effective for audits of non-accelerated filers for fiscal years ending on or after June 15, 2010 under Section 404(b) of the Sarbanes-Oxley Act of 2002. Thousands of smaller public companies and their auditors are preparing to comply with the attestation requirements under Section 404 for the first time. In an effort to assist auditors of smaller public companies with all the information they need to comply, the CAQ has created this Web resource, Resources For Integrated Audits of Non-Accelerated Filers, to provide member firms with information from a variety of sources, including regulators, standards-setting authorities, and the CAQ itself in one central location.
