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Reference to the Standards of the PCAOB in Auditors’ Reports

Friday, November 9, 2012

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Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 1, References in Auditors’ Reports to the Standards of the Public Company Accounting Oversight Board, requires an auditor, in connection with audit engagements performed for issuers in accordance with the auditing and related professional practice standards of the PCAOB, to refer to the “standards of the Public Company Accounting Oversight Board (United States)” in the auditor’s report. It would not be appropriate for the auditor’s report for issuers or other entities that require compliance with PCAOB requirements to reference only the auditing standards of the PCAOB, as this may imply that the auditor did not adhere to the PCAOB’s related professional practice standards in conducting the audit. For example, when the principal auditor makes reference in their report to the report of another auditor, including an auditor of a non-issuer equity method investee, the other auditor’s report must refer to the standards of the PCAOB and not be limited to the auditing standards of the PCAOB.

Section 4110.5 of the SEC’s Division of Corporation Finance Financial Reporting Manual provides further information, including a chart that outlines the application of certain PCAOB reporting requirements in SEC filings for various types of entities.