PCAOB seeks comment on audit explanation proposal

The Public Company Accounting Oversight Board, a Washington-based auditor watchdog, is currently looking for feedback on proposed changes that may require auditors to explain their work, according to Bloomberg.

If passed, the changes will require firms that review the books of United States-registered companies to offer more detailed information about the findings of accounts payable audits, duplicate payment audits and others, as opposed to simply indicating whether or not the rules were followed.

"The auditor is in a unique position to provide relevant and useful information, because of the auditor's extensive knowledge of the company and as an independent third-party," said Martin F. Baumann, chief auditor and director of professional standards at PCAOB.

In a recent concept release, PCAOB presents options for changes to auditors' reporting models in order to provide more transparency in the audit process, as well as insight into companies' financial statements. Alternatives include discussion and analysis from the auditor, the required and expanded use of emphasis paragraphs, auditor assurance on information outside of financial statements and clarification of language in the standard auditor's report.

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