&articleOne vital provision of the proposals to reign in Sarbanes-Oxley compliance costs is a retreat on requirements that external auditors gather original evidence to support their conclusions—but skepticism is already whirling over whether the pullback will achieve the intended outcome.
In its proposed package of new rules to govern the audit of internal control over financial reporting, the Public Company Accounting Oversight Board has recommended that auditors make more use of others’ work in the financial reporting process to reach their audit conclusions. That dovetails with the Securities and Exchange Commission’s guidance to companies on how to assess their internal controls, and generally give company management a stronger hand in the internal control assessment and reporting process.
