The Public Company Accounting Oversight Board (PCAOB) issued a request for public comment on June 23, 2026, seeking input on its standard-setting and research agendas. This includes revisiting old projects such as noncompliance with laws and regulations (NOCLAR) and firm and engagement performance metrics – both of which some investor protection advocates supported but were criticized by audit firms when they were developed during Erica Williams’ tenure as PCAOB chair. After Donald Trump was elected President, the board set aside these projects, which were either in advanced stages or had been recently completed.
The document also asks for input on the board’s approach to developing auditing standards, and the potential effects of a recent Securities and Exchange Commission (SEC) proposal related to optional semi-annual reporting.
Comments are due August 7 on PCAOB Release No. 2026-005, Request for Public Comment on PCAOB Standard Setting.
“As we continue to advance our standard-setting and research activities, our agendas must evolve with the audit and financial reporting ecosystem,” said PCAOB Chairman Demetrios Logothetis in a statement. “This open comment period will allow us to hear directly from stakeholders as we refine our priorities, ensuring that our efforts remain focused, practical, and aligned with the needs of today’s investors and capital markets.”
This marks the first time the PCAOB has requested public comment on its standard-setting prioritization, reflecting the feedback the board received when it solicited input on its strategic priorities in the spring.
On NOCLAR, the board would again consider potential changes to Auditing Standards (AS) 2405, Illegal Acts by Clients. Among other things, the board would reconsider feedback it received—via comment letters and a roundtable—on the 2023 proposal. The PCAOB would also consider the requirements of other standard-setters such as the AICPA and the International Auditing and Assurance Standards Board (IAASB).
On firm and engagement performance metrics, rebranded from audit quality indicators (AQIs), the PCAOB would once more consider whether to require firms to report firm-level and engagement-level metrics. The board would consider whether more research and outreach are needed.
Other projects
Other potential projects include items that have been on the agenda previously:
- data and technology – the objective is to “consider changes related to data and technology, including artificial intelligence and digital assets, as a critical emerging issue relevant to the development of the PCAOB’s strategic priorities.”
- fraud – this project is to consider whether revisions should be made to AS 2401, Consideration of Fraud in a Financial Statement Audit. The PCAOB is considering updates to better align auditors’ responsibilities for identifying and responding to intentional acts that cause material financial statement misstatements with the auditor’s broader risk assessment process. This includes considering how emerging technologies may affect fraud risks and audit procedures. The PCAOB would also evaluate whether elements of ISA 240, updated by the IAASB in 2025, could inform potential changes to AS 2401. In addition, any amendments to AS 2401 would be considered alongside possible changes to AS 2405 because fraud and NOCLAR are closely related audit issues.
- critical audit matters (CAMs) – the goal is to consider changes to AS 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion. Further research would examine why the average number of CAMs has continued to decline over time, and whether the content and usefulness of CAM disclosures should be improved. The research would also assess whether additional PCAOB guidance, standard-setting changes, or other regulatory actions are needed. In addition, the PCAOB would study stakeholder concerns that certain areas involving significant audit difficulty may not meet the current definition of a CAM, even though investors may benefit from disclosure about them.
- auditor independence – this project is to consider whether the interim ethics and independence standards should be updated. The SEC is also taking a fresh look at its auditor independence rules, and the two regulators are likely to work closely.
Approach to standard setting
The PCAOB is also reviewing its process for developing auditing standards and is considering whether to adopt a formal conceptual framework. The board said such a framework “could promote greater transparency, consistency of standards, and efficient use of our resources.”
The document states that a framework could define objectives such as “enhancing audit quality and the reliability of audit reports by establishing clear, enforceable, and risk-focused requirements for auditor performance.”
The PCAOB said it is also evaluating how its standards align with those of other standard-setting bodies, including the IAASB. It noted that it has “historically considered the analogous IAASB standards in our standard-setting activities.”
Potential impact of SEC proposal
In addition, the request addresses a May SEC proposal that would allow public companies to opt for semiannual reporting instead of quarterly reporting.
The PCAOB said the change could affect existing auditing standards, particularly AS 6101, Letters for Underwriters and Certain Other Requesting Parties, which governs auditors’ responsibilities in issuing comfort letters.
The board stated it is “considering whether to make narrow, conforming amendments to AS 6101 to accommodate the changes the SEC may adopt to its reporting requirements.”
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