The SEC recently approved the PCAOB’s updated standards for public company audits involving multiple firms, clearing the way for the new rules to take effect for financial statement audits for fiscal years ending on or after Dec. 15, 2024.
The PCAOB issued the new standards in June. With 68% of Fortune 500 issuer audits and 26% of all public company audits in 2021, the SEC said it supported the stronger requirements for lead auditors.
The added standards will improve audit quality and investor protection by specifying procedures for those supervising multi-firm audits, including requirements that instruct lead auditors to prioritize their activities around high-risk areas, SEC Chair Gary Gensler added.