Nearly two years after first proposing a standard on how auditors must communicate with audit committees, the Public Company Accounting Oversight Board is hoping the third time is indeed the charm.

The PCAOB is proposing for the third time its standard on Communications with Audit Committees and related amendments to existing PCAOB standards. The proposal was first exposed for public comment in March 2010, then again in late 2010 following feedback from the PCAOB's Standing Advisory Group and a public roundtable.

As the board considered the feedback, it also finalized eight new standards on risk assessment (Auditing Standards No. 8-15) and was assigned responsibility to oversee the audits of brokers and dealers that are registered with the Securities and Exchange Commission. The board made some revisions to the communications standard to reflect those two developments. It also added a new requirement for the auditor to alert the audit committee to any significant unusual transactions that are outside the normal course of business and to explain to the audit committee the auditor's understanding of the business rationale for those transactions.

“The new proposed standard is designed to benefit investors by enhancing the relevance and quality of the communications between the auditor and the audit committee,” said PCAOB Chairman James Doty, reading from prepared remarks at a public meeting to repropose the standard. “It should also help auditors perform their job by fostering thoughtful and engaged discussions between the auditor and the audit committee that, over time, arm the audit committee with the information it will need when a tough issue arises and the time comes to champion investor interests.”

PCAOB members Steven Harris said he's hopeful the board can finalize the standard “in short order” after this latest round of exposure and comment is complete. “To me, many of the requirements we are proposing are self-evident and auditors should be communicating this information as a matter of course to audit committees,” he said, also speaking from prepared remarks. In his view, the two most important elements in the standard are the requirements for auditors to address significant unusual transactions with the audit committee and to address any concerns auditors may have about the entity's ability to continue as a going concern.

The revised proposal is open for public comment through Feb. 29, 2012.