Heads up: Accountants will no longer enjoy a 45-day grace period to file financial reports after completing an audit.
The Public Company Accounting Oversight Board (PCAOB) is shortening the two-decades-old filing deadline to 14 days after an audit is officially wrapped up.
The new 14-day filing deadline for filing financial statements goes into effect on December 15 for accounting firms that handle audits for more than 100 publicly-traded companies. Smaller accounting outfits will have until December 15, 2025 to begin complying with the 14-day deadline.
Shortening the deadline to file will allow PCAOB to inspect reports sooner and “reduce the window of opportunity for improper alteration of audit documentation,” announced board chair Erica Williams. Securities and Exchange Commission (SEC) chair Gary Gensler urged PCAOB to shorten the filing period as part of the Biden administration’s effort to increase transparency for investors and reduce the risk of fraud.
Audit Standard Reaffirms Accountants’ Duty to Be Skeptics
PCAOB announced the filing change as part of its new accounting standard (AS) 1000, which will replace ASs 1001, 1005, 1010 and 1015. The four standards have been in place since 2003.
Some good news: PCAOB isn’t introducing any new principles or responsibilities for accounting firms to comply with. Many CPAs attribute a recent surge in accounting mistakes to regulatory overload from the feds and some states.
PCAOB stresses that CPAs must take a skeptical view of clients’ financial records. The goal should always be to seek the truth. “[An] auditor’s professional skepticism extends beyond the evaluation of the sufficiency and appropriateness of audit evidence … [an auditor must exercise] professional skepticism throughout the audit process.”
The PCAOB is a nonprofit corporation established by Congress to oversee audits of public companies, auditors and brokers, as well as compliance reports filed pursuant to federal securities laws, to help protect investors.
