Advancing the Board’s strategic goal of modernizing PCAOB standards, the new standard replaces and improves a foundational set of standards that had not been updated significantly since their adoption on an interim basis more than 20 years ago

The Public Company Accounting Oversight Board (PCAOB) today adopted a new auditing standard, AS 1000, General Responsibilities of the Auditor in Conducting an Audit, along with related amendments to other PCAOB standards.

AS 1000 enhances and consolidates a group of standards that were adopted on an interim basis by the PCAOB in April 2003 and that address the general principles and responsibilities of the auditor, such as due professional care, professional skepticism, competence, and professional judgment.

Merging these foundational standards into one standard, AS 1000 enhances investor protection by reaffirming the general principles and responsibilities of the auditor and solidifying the foundation of every audit.

“The Board’s action today will help ensure that PCAOB standards on the most fundamental auditor responsibilities are up to date and optimized for investor protection,” said PCAOB Chair Erica Y. Williams. “The Board thanks the commenters whose thoughtful input helped to shape this new standard along with related amendments to other standards, and we look forward to monitoring their implementation and impact.”

The adoption of the new standard and related amendments to other standards was informed by input from an extensive notice-and-comment process. As a result of the comments received, the standard and related amendments were clarified and strengthened in several ways.

Key Provisions of the New Standard and Related Amendments

Since the PCAOB’s adoption of the interim standards in 2003, the auditing environment has evolved in many ways, including new PCAOB standards, new or revised independence requirements, and advancements in technology that have increased the availability of electronic audit tools and use of audit software. AS 1000 and the related amendments will:

• Modernize, clarify, and streamline the general principles and responsibilities of auditors and provide a more logical presentation, which should enhance the useability of the standards by making them easier to read, understand, and apply. The new standard does not create any new principles or responsibilities but simply clarifies those that already exist. In response to comments on the proposal, revisions were made in the adopting release to express a longstanding principle of public accounting – specifically, that the auditor’s responsibility to investors transcends the auditor’s relationship with management and the audit committee of the company under audit. The changes further clarify that this responsibility provides the foundation for an objective and independent audit, while making clear the standard does not create any new legal obligation for auditors.
• Clarify the auditor’s responsibility to evaluate whether the financial statements are “presented fairly.” In response to comments on the proposal, revisions were made in the adopting release to clarify it does not change the auditor’s existing responsibilities for evaluating whether the financial statements are presented fairly in conformity with the applicable financial reporting framework.
• Clarify the engagement partner’s due professional care responsibilities by adding specificity to certain audit performance principles set out in the standards. In response to comments on the proposal, revisions were made in the adopting release to clarify provisions that highlight the important role engagement partners play – and to help draw a distinction between the responsibilities applicable to all auditors and those that are incremental for engagement partners.
• Accelerate the documentation completion date by reducing the maximum period for the auditor to assemble a complete and final set of audit documentation from 45 days to 14 days. The new documentation completion date will reduce the window of opportunity for improper alteration of audit documentation and also enable the Board to potentially begin the inspection process sooner after completion of an audit. In response to comments on the proposal, revisions were made in the adopting release to take a phased-in approach and provide smaller firms additional time to comply with the new documentation completion date.
• Clarify an auditor’s professional skepticism extends to other information that is obtained to comply with PCAOB standards and rules. In response to comments on the proposal, revisions were made in the adopting release to clarify that an auditor’s professional skepticism extends beyond the evaluation of the sufficiency and appropriateness of audit evidence. As noted by this change, an auditor exercises professional skepticism throughout the audit process.

Information on the history of this project, including historical documents and comments received, can be found in Rulemaking Docket 049 and the related Standard-Setting Project page.

The new standard will apply to all audits conducted under PCAOB standards. Subject to approval by the Securities and Exchange Commission, the new standard and related amendments will take effect for audits of financial statements for fiscal years beginning on or after December 15, 2024. For certain firms, the amendment relating to the documentation completion date will take effect for audits of financial statements for fiscal years beginning on or after Dec. 15, 2025.

For more information regarding the PCAOB’s standard-setting activity, visit the Standards page.