PCAOB will concentrate on revenue audits
Publication date: 30 October 2013
At the recent conference of Brigham Young University alumni in Provo (Utah) Jay Hanson from the Public Company Accounting Oversight Board promised that auditing standards on revenue recognition would be paid most attention very soon (although they are currently not on the PCAOB’s agenda yet).
“Another audit area that we will need to turn to in the near future, although it is not yet on our standard setting agenda, is auditing revenue. Revenue is probably the most important number on the financial statements for most investors, and it is one in which our inspectors frequently find problems. Revenue recognition also is a complex accounting area” (www.accountingtoday.com) – said Hanson.
He reminded of the ongoing work of IASB and FASB on the new joint standard which will hopefully be finished soon, creating a fundamentally different basis for revenue recognition. Hanson hopes that his organization will spend enough resources to develop a new auditing standard on revenues and that they will publish it with enough time to allow everybody to get used to it and adopt both of the standards simultaneously.
Audit companies today face many problems, on which Jay Hanson also speculated a bit during his speech. There are many challenges for any representative of the audit profession - like, for instance, the need to protect interests of investors above everything else, to perform highest-quality audits, to provide optimal work-and-life balance to employees.
“I am directly asking firm leaders what they are doing to ensure their audit teams have the resources to perform a quality audit. An overworked and exhausted audit staff, manager or partner cannot perform the job investors and audit committees expect” (www.accountingtoday.com) – added Hanson.