PCAOB rolls out new agendas

The Public Company Accounting Oversight Board (PCAOB) recently released updated agendas for standard-setting, research, and rulemaking activities after a “first-ever” public comment period.

The updated plans include standard-setting projects on multiple topics, including “auditor independence, fraud, noncompliance with laws and regulations, and going concern; research projects on data and technology, firm and engagement performance metrics, and communications with audit committees,” the PCAOB said in a release.

So what’s the difference between the PCAOB’s agenda and its 2026–2030 strategic plan, which we heard so much about over the summer? While the strategic plan deals with high-level goals of the board—like “modernizing inspections and registration, including placing more emphasis on firms’ quality control (QC) systems,” as CFO Brew previously reported, the agendas “translate those goals and objectives into specific standard-setting and research initiatives,” according to the PCAOB.

Among the research projects related to data and technology on its agenda, the board intends to examine “how auditors and companies are using new technologies and how those technologies may affect audit quality.”

AI focus. Among the 35 comment letters the PCAOB received on standard-setting, technology research in particular got some attention from the Big Four as they stressed the need to address the use of AI in the audit.

“The rapid evolution and increasing use of AI across the financial reporting landscape heightens the importance of a thoughtful, agile, and forward-looking approach to standard setting that both promotes audit quality and enables responsible innovation,” KPMG said in its comment letter. But due to AI’s complexity, breadth, and fast pace of change, KPMG also warned that “AI is not a discrete topic that can be addressed through a single, comprehensive rulemaking effort; rather, it is a cross-cutting capability that impacts multiple aspects of financial reporting and auditing.”

KPMG and PwC recommended that the PCAOB establish a dedicated AI task force. KPMG said the task force could “incorporat[e] aspects of a working group model like the FASB’s Emerging Issues Task Force, which leverages diverse stakeholder perspectives to support research and analysis and provide recommendations for board consideration.”

PwC recommended that in the short term, the PCAOB “issue guidance to raise awareness and provide clarity in the application of the PCAOB’s professional standards given the broad, varied, and rapidly evolving use of advanced technology, including AI, impacting the audit.”

EY struck a note of caution in its comment letter, warning the board that “developing premature or overly prescriptive standards could create unintended consequences and hinder innovation that might otherwise enhance audit quality.”

Feedback loop. The PCAOB said in its release announcing the updated agendas that seeking public comment to inform them “reflects Chairman Demetrios (Jim) Logothetis’ desire to ensure all perspectives are considered during standard-setting and research activities.”

“Under these updated agendas, we will continue to focus our efforts on projects that are practical, responsive to today’s capital markets, and ultimately, advance audit quality and investor protection,” Logothetis said in a statement.