Supervision of Other Auditors

What Was Changed

The amendments adopted by the Board strengthen requirements for planning and supervising audits involving accounting firms and individual accountants (collectively, other auditors) outside the accounting firm that issues the auditor’s report (lead auditor).

The amendments to the Board’s auditing standards apply a risk-based supervisory approach to the lead auditor’s oversight of other auditors and require that the lead auditor perform certain procedures when planning and supervising an audit that involves other auditors.

In addition, the Board adopted a new auditing standard that applies when the lead auditor divides responsibility for an audit with another accounting firm (referred-to auditor).

Amendments and New Standard

The Adopting Release includes three appendices that set forth the amendments and new standard: 

Appendix 1 sets forth the amendments to certain PCAOB auditing standards that increase and improve lead auditors’ involvement in and evaluation of other auditors’ work: AS 1015, Due Professional Care in the Performance of Work; AS 1105, Audit Evidence; AS 1201, Supervision of the Audit Engagement; AS 1215, Audit Documentation; AS 1220, Engagement Quality Review; AS 2101, Audit Planning.

Appendix 2 presents the new auditing standard regarding divided-responsibility audits: AS 1206, Dividing Responsibility for the Audit with Another Accounting Firm.

Appendix 3 includes conforming amendments to other PCAOB auditing standards, auditing interpretations, attestation standards, rules, and a form. 

Additional information on the amendments and new auditing standard: 

• SEC Action: SEC Release No. 34-95488
• Project History: Other Auditors

Why Did the PCAOB Adopt these Amendments?

The roles of other auditors have increased as companies’ global operations have grown. It is important for investor protection that the lead auditor adequately plan and supervise the work of other auditors so that the audit is performed in accordance with PCAOB standards and provides sufficient appropriate evidence to support the lead auditor’s opinion in the audit report.

The amendments are intended to increase and improve the lead auditor’s involvement in and evaluation of the other auditors’ work. 

What Are the Effective Dates?

The amendments and new standard are effective for audits of fiscal years ending on or after December 15, 2024.

Staff Presentation (November 2023)

The PCAOB staff produced videos on the implementation of amendments to PCAOB standards related to the supervision of other auditors.

PCAOB staff will conduct economic analysis to assess the implementation of the amended requirements for planning and supervising audits involving other auditors.

To inform the analysis, the staff will analyze relevant data, conduct surveys, and interview stakeholders.

The PCAOB expects to produce a report no earlier than 2026 to communicate findings and perspectives on the initial impact of the new requirements.

Further information is available in the post-implementation review section of this website.