The PCAOB Audit Reporting Model: Evolution Toward Expanding Auditor Responsibilities for SMEs

• In Event: Auditing II

Abstract

Along with the regulatory efforts of federal legislation, primarily the broader umbrella of the SEC and the Public Company Accounting Oversight Board (PCAOB) created by the Sarbanes Oxley Act of 2002, the substance and wording of the CPA’s standard audit reporting obligation is increasingly expanded for public issuers and widely-held enterprises. This expansion may find itself drilling down into the audits of private and small and medium-sized entities (SMEs) originally not on the radar screen of the evangelists of the first decade of the 21st century. This paper describes the historic evolution of the auditor’s report on management’s financial statements, analyzes the strengths and shortcomings of the current work before the PCAOB in further tweaking of the audit reporting model, and assesses the viability of extension of these developments into private markets in the United States.

Authors

• Maria L Bullen, Dominican University of California

• Greg Kordecki, Clayton State University