The Securities and Exchange Commission today adopted revised standards regarding the general responsibilities of auditors and the use of technology-assisted analysis in conducting audits. It also adopted amendments to a Public Company Accounting Oversight Board ethics rule governing the liability of individuals who contribute to audit firm violations.
The SEC approved the PCAOB’s new “AS 1000, General Responsibilities of the Auditor in Conducting an Audit,” along with related amendments, which reaffirms and modernizes the general principles and responsibilities of auditors when conducting an audit, the commission said in a statement. It also adopted “AS 1105, Audit Evidence” and “AS 2301, The Auditor’s Response to the Risks of Material Misstatement,” which clarify auditors’ responsibilities when using analytical tools in conducting audits.
In addition, the SEC adopted the PCAOB’s amendments to “Rule 3502, Responsibility Not to Knowingly or Recklessly Contribute to Violations,” which governs the liability of an individual of a registered public accounting firm who contributes to the firm’s violations of the laws, rules and standards that the board enforces. The amendments revise from recklessness to negligence the standard for an associated person’s contributory liability. They also maintain the requirement that to be held liable, an associated person must have contributed to the firm’s violation “directly and substantially,” the SEC said.
