The PCAOB staff will release the guidance May 16, according to Dow Jones. The group is also considering changes to its rule on internal control reviews; however, McDonough acknowledged that this change could take six months and would be too late to be of much help this year.
Many executives have complained that the rule has made it so attention is diverted from business and merger activity towards internal controls, according to Dow Jones. At a meeting with the Securities and Exchange Commission (SEC) on the internal-control measures, many auditors said that they are worried about being second-guessed by regulators, which has led to the PCAOB planning to release further guidance to auditors. The guidance will focus on reducing “give-and-take” between companies and their independent auditors, according to PCAOB board members.
Sarbanes-Oxley requires US public companies to make annual assessments of their internal controls over financial reporting, subject to further review by an independent auditor. Larger problems must be reported to shareholders. Large firms have already had to comply with the law, and have reported numerous problems – the largest being cost – with the rule (See Survey: Average SOX Compliance Bill is $16M ). Small companies were granted a one-year extension to comply with the rule (See SEC Delays Certain SOX Compliance Deadlines 12 Months ).