Accounting regulators are planning to give auditors some new advice in two forms: a generalized report on its 2004 inspection findings—providing blanket advice on auditing for fraud and internal control reporting—and a question-and-answer piece on auditing accounting related to stock option expensing.
“We’ve been analyzing the results from our inspections of firms to determine what is working and what is not,” said Douglas Carmichael, chief auditor of the Public Company Accounting Oversight Board, in an opening statement to a meeting last week of the board’s Standing Advisory Group. “To the extent we find problems common to multiple audit firms, either in relation to Section 404 implementation, considering the risks of fraud in an audit, or in other areas, the Board may also issue, under the Board’s Rule 4010, more generalized reports that describe the problems and appropriate solutions.”
