Just as accounting standards were reorganized by topic rather than chronology, auditing standards are getting a shuffle to make them easier to navigate.

The Public Company Accounting Oversight Board has approved the reorganization of its auditing standards, integrating standard the board has written with historical standards the board adopted on an interim basis at its inception under Sarbanes-Oxley. "The standards will be organized by topics that generally follow the flow of the audit process, making their use easier and more efficient for auditors," said PCAOB Chairman James Doty.

The PCAOB issued a proposal and a supplemental request for feedback on its intended reorganization plan. In an public meeting, the board approved the plan to reorganize standards under five basic categories: general auditing standards, audit procedures, auditor reporting, matters related to filings under securities law, and a final catch-all category for other issues associated with audits.

Under general auditing standards, the PCAOB will place standards on broad auditing principles, concepts, activities and communications. Audit procedure standards will include all standards for how auditors should go about planning and performing the audit and obtaining audit evidence. Reporting will include standards on audit reports. Securities-focused standards will include any standards that speak to an auditor responsibilities in filings for securities offerings and reviews of interim financial information. The final category will include standards for work performed in conjunction with the audit.

The PCAOB says the reorganization does not impose any new standards on auditors, but it will refresh the standards to remove references to rules or requirements that no longer exist or other inoperative language. It also will introduce a new numbering system As with all PCAOB standards, the SEC must approve the PCAOB’s reorganization before it becomes effective. The board is targeting an effective date of Dec. 31, 2016. The board says it will update its website with the newly organized standards under the new numbering system after the SEC approves it.

Going forward, any new auditing standards adopted by the PCAOB will be issued as new or replacement sections and paragraphs within the new structure, said Martin Baumann, chief auditor and director of professional standards at the PCAOB. “It is my hope that this reorganization is the first step in making PCAOB standards more user-friendly and accessible to practitioners and academics,” said PCAOB member Jeanette Franzel. She’s also hopeful it will facilitate comparison with other auditing standards such as those of the International Auditing and Assurance Standards Board, and the Auditing Standards Board of the American Institute of Certified Public Accountants.

The Financial Accounting Standards Board spent five years working on its Accounting Standards Codification, which reorganized all of the historical pronouncements in Generally Accepted Accounting Principles into a topical structure. It took effect in 2009.

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