The Public Company Accounting Oversight Board gave reminders for auditors who audit smaller public companies in its latest staff publication, “
This publication highlights reminders related to engagement acceptance for initial engagements for new clients, and shares good practices.
Some of the reminders the staff highlighted related to evaluating information (like were there any recent changes in ownership, company management, the board of directors or the composition of the audit committee related to the engagement?) and related to change of auditors (like did the predecessor auditor have any disagreements with management as to accounting principles, auditing procedures, etc.?)
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PCAOB staff noted four good practices, including assessing partner capacity: “In both the acceptance and continuance process, audit firms have implemented a ‘scorecard’ where points are assigned to a partner based on the number and type of audits already served,” the Audit Focus reads. “More points indicate a higher workload. The goal is to keep each partner’s workload at a level where they are below a certain points threshold and are therefore able to serve a new or existing engagement. Partners exceeding the point goal are required to discuss partner assignment with leadership to determine their capacity to take on another engagement.”
The staff also identified assessing partner capacity, implementation of a pre-assessment process, and use of templates among their good practices.
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