PSC Provides Feedback on PCAOB’s Proposed Standard‑Setting Priorities
The PSC provided feedback on the PCAOB’s request for public comment on standard-setting and research priorities. The PSC recommends prioritizing technology and AI, fraud, substantive analytical procedures, attestation standards and audit evidence issues.
The TXCPA Professional Standards Committee (PSC) provided feedback on the PCAOB’s proposed standard‑setting priorities, emphasizing that data and technology—especially AI—should remain central focus areas but addressed primarily through staff guidance rather than new standards. The PSC notes that inspectors’ expectations often exceed what current standards require and timely guidance would improve consistency.
The committee recommends revising fraud‑related standards AS 2401 and AS 2405 together, incorporating materiality more explicitly, while stating that no further action is needed on Critical Audit Matters due to their limited value. The PSC strongly opposes continuing the NOCLAR project and engagement performance metrics initiatives, citing high cost and minimal benefit, and encourages the PCAOB to rely on the SEC’s independence framework instead of maintaining separate interim independence standards.
Beyond the PCAOB’s listed priorities, the PSC urges attention to substantive analytical procedures and attestation standards, recommending alignment with the AICPA’s attestation project and updates that encourage more effective use of analytics.
The PSC also urges the PCAOB to rigorously evaluate economic costs, benefits, competitive effects, and unintended consequences—particularly for smaller firms—and recommends stakeholder outreach and beta testing before issuing proposals. For digital assets, the committee again favors staff guidance, noting that smaller firms have been penalized due to unclear expectations.
Finally, regarding the SEC’s proposal for optional semiannual reporting, the PSC recommends monitoring developments and updating AS 6101 if needed, while engaging stakeholders such as underwriters.
Read the Request for Public Comment here. View TXCPA PSC comment letter here.
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