Strong advice on AS5 to PCAOB

AS5 is shaping up as quite controversial, as you now. A bevy of comments hit the PCAOB just as the 70-day comments period was closing. And then there's the PCAOB advisory panel, which also delivered an ear-full. It is clear that there are many who wonder if the net result will be less effective audits. The goal is solid: A more efficient approach to audits and controls. But will that amount to mere watering down? Well, it's really a matter of semantics. Companies clearly think accounting firms have gone overboard, and welcome anything that limits their attention. Other issues also percolated: The advisory board would rather use complexity, not asset levels, to determine the scope of Sarbox work. It's unclear on whether accounting firms should be able to use the work of others, something banned by AS2. And the board would like a list of the principles that the PCAOB would like all accountants to keep in mind. Basically, all these issues will need to be cleared up if managers and accountants are to get on the same page.

For more:
- read this article from cfo.com
- check out this round-up of organizations commenting on the new standard
- view the comments here (.pdf)

Related Article:
Will AS5 really make compliance easier? Report