backOn November 26, 2024, the PCAOB published two Staff guidance documents related to the implementation of QC 1000, the new quality control standard scheduled to become effective December 15, 2025.
The first publication, Insights for Firms QC 1000: A Firm’s System of Quality Control, provides 140 pages of detailed guidance regarding QC 1000. Among other topics, this document explains the required roles under QC 1000, the risk assessment process, and the External Quality Control Function (“EQCF”) requirement for firms with over 100 issuer audit clients. The document also provides Staff guidance on implementation of a QC system under the new standard, the evaluation of and reporting on a firm’s QC system, QC 1000 documentation requirements, and the monitoring and remediation process.
The second publication, Insights for Firms AS 2901: Responding to Engagement Deficiencies after Issuance of the Auditor’s Report, provides guidance to firms regarding AS 2901, which expanded the auditor’s responsibility to respond to deficiencies on completed engagements. The Staff’s guidance provides firms with information on how to respond to an engagement deficiency and how to document the response. The document emphasizes that an “engagement deficiency” under AS 2901 includes a deficiency in a financial statement or ICFR audit regardless of whether the deficiency results in the audit opinion being unsupported. The document also notes that AS 2901 requires firms to respond to all engagement deficiencies identified on completed engagements unless it is probable that the auditor’s report is not being relied upon.