Assurance Flash Report - November 2014
The SEC has approved the PCAOB's Proposed Rules on Auditing Standard No. 18, Related Parties, Amendments to Certain PCAOB Auditing Standards Regarding Significant Unusual Transactions, and Other Amendments to PCAOB Auditing Standards (AS 18), as previously adopted by the PCAOB in June 2014. AS 18 is effective for audits of financial statements for fiscal years beginning on or after December 15, 2014, including review of interim financial information within these fiscal years.
The new auditing standard and amendments are meant to strengthen auditor performance with respect to three critical areas:
- Related party transactions;
- Significant unusual transactions; and
- A company's financial relationships and transactions with its executive officers.