backOn June 26, 2023, the PCAOB proposed, and solicited public comment on, a set of new and revised standards addressing an auditor’s use of technology-assisted analysis in audit procedures. The PCAOB asserts that the proposal is designed to enhance existing standards relating to audit evidence and the auditor’s responses to risks of material misstatement by: (1) further clarifying the differences between tests of details and analytical procedures; (2) emphasizing the importance of appropriate disaggregation (e.g., regional or global) or detail (e.g., product type, division) of information used as audit evidence, based on what level of disaggregation or detail is necessary to achieve the objective of an audit procedure; (3) specifying that auditors should design and perform multiple-purpose audit procedures when audit evidence is used for more than one purpose; (4) specifying the factors that auditors should consider when identifying items for further investigation, as part of designing or performing substantive procedures; and (5) emphasizing auditor responsibilities to evaluate the reliability of external information maintained by a company in electronic format and used as audit evidence. In its press release, the PCAOB described the proposal as an attempt “to improve audit quality by reducing the likelihood that an auditor who uses technology-assisted analysis will issue an opinion without obtaining sufficient appropriate audit evidence.” Public comments on the proposal are due by August 28, 2023.
The PCAOB’s proposed standard is available here, with accompanying press release available here. Statements in support issued by each Board member are available here: Williams, DesParte, Ho, Stein, and Thompson.