The Public Company Accounting Oversight Board (PCAOB) on September 30, 2026, published the first standard-setting and rulemaking agendas under the new board leadership headed by Demetrios Logothetis who became chairman in February.
While most projects are not new, there is a notable new standard-setting item on comfort letter engagements and the development of a conceptual framework for standard-setting.
This is the first time the PCAOB has decided on its agendas following a consultation with the public.
Comfort letter engagements
The project on “negative assurance related to comfort letter engagements” is on targeted amendments to PCAOB AS 6101, Letters for Underwriters and Certain Other Requesting Parties, “related to the auditor’s ability to provide negative assurance on subsequent changes to specified financial statement line items.”
The staff is working on a proposal for the board to consider in the fourth quarter, according to the agenda.
Other standard-setting projects
Another concrete project is auditor independence, which is an area that SEC Chief Accountant Kurt Hohl has asked the PCAOB to address, given many of its independence standards were adopted from the AICPA’s on a temporary basis. Moreover, the market has changed since two decades ago when the PCAOB was established by Congress to oversee public company audits. Among other things, there has been an increase in private equity investments in accounting firms in the last few years.
The SEC oversees the PCAOB. The SEC’s Office of the Chief Accountant is also considering whether commission auditor independence rules should be revised but has not made any determinations.
As for the PCAOB, the staff is preparing a proposal for the board to consider in the first quarter of 2027.
Other projects on agenda without specific timing yet
The PCAOB also put fraud, noncompliance with laws and regulations (NOCLAR), and going concern – all longstanding projects – back on the standard-setting agenda. But none of these items have a specific timing yet. These three projects say: “Staff is evaluating feedback and developing a project plan.”
NOCLAR is especially notable as the previous board under Erica Williams’ leadership wanted to finalize the PCAOB’s proposal even though it was opposed by auditors and public companies. After the presidential election in November 2024 when Trump won, the PCAOB had to reverse course.
Today’s PCAOB seems to have a different NOCLAR project in mind as it is looking towards a more scalable and risk-based standard. Moreover, the board – per Hohl’s instructions as well – wants to have greater alignment with international standards that are favored by large firms.
The NOCLAR project is to:
- Consider amendments to modernize AS 2405, Illegal Acts by Clients, by integrating a scalable, risk-based approach aligned with the Board’s risk assessment standards and considering other relevant developments.
- Consider alignment of the standard with the requirements of Section 10A of the Securities Exchange Act of 1934.
- Consider alignment, as appropriate, with the requirements of ISA 250 (Revised), and AU-C 250, both of which are titled Consideration of Laws and Regulations in an Audit of Financial Statements.
Conceptual framework
The PCAOB is developing a conceptual framework for standard setting “to promote transparency, consistency of standards, and efficient use of our resources.”
The framework “can articulate a structured, principles-based approach to standard setting while remaining firmly grounded in the PCAOB’s statutory mandate to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports,” the agenda says.
“The PCAOB supports the objective of increased transparency of the standard-setting process,” the agenda adds. “A conceptual framework may also address alignment of our standards with those of other standard setters. Development of the conceptual framework will be conducted in parallel with the above standard-setting and research projects.”
Research projects
The new research agenda includes a new project: communications with audit committees. This is to “perform research and outreach with stakeholders on communications to audit committees to enhance their oversight activities.”
While the previous board adopted—and subsequently withdrew following the presidential election—the disclosure rule on firm and engagement performance metrics, previously better known as audit quality indicators (AQIs), today’s PCAOB has this item labeled to do additional research.
A perpetual research project, data and technology, is on the new agenda. The agenda has a separate section that notes the “importance” of this research, however.
“As auditors, public companies, and broker-dealers increasingly use data analytics, automation, artificial intelligence, and other technologies, the PCAOB is examining how these developments affect audits and whether amending PCAOB standards or developing staff guidance may be appropriate,” the agenda states.
Permanent broker-dealer audit inspection program proposal coming soon
Another proposal is coming in the fourth quarter aside from negative assurance related to comfort letter engagements. This proposal concerns a permanent broker-dealer audit inspection program. The PCAOB has been conducting these inspections under an interim program for over a dozen years.
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