[Federal Register Volume 90, Number 168 (Wednesday, September 3, 2025)]
[Notices]
[Pages 42649-42651]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-16826]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103803; File No. PCAOB-2025-01]
Public Company Accounting Oversight Board; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Postponing the
Effective Date of Amendments to Board Standards, Rules, and Forms
Adopted on May 13, 2024
August 28, 2025.
Pursuant to Section 107(b) of the Sarbanes-Oxley Act of 2002 (the
``Act''), notice is hereby given that on [Date of Form 19b-4
Submission], the Public Company Accounting Oversight Board (``Board''
or ``PCAOB'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change described in Items
I, II, and III below, which items have been prepared by the Board. The
PCAOB has designated such proposed rule change as ``constituting a
stated policy, practice, or interpretation with respect to the meaning,
administration, or
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enforcement of an existing rule'' of the PCAOB under Section
19(b)(3)(A)(i) of the Securities Exchange Act of 1934 (as incorporated
by reference into Section 107(b)(4) of the Act) and Rule 19b-4(f)(1)
thereunder. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
I. Board's Statement of the Terms of Substance of the Proposed Rules
The Board is filing with the Commission a proposed rule change to
delay the effective date of QC 1000, A Firm's System of Quality
Control, and other new and amended PCAOB standards, rules, and forms
adopted on May 13, 2024, and identified in the PCAOB's May 24, 2024
Form 19b-4 from December 15, 2025, to December 15, 2026. The PCAOB is
not proposing any changes to the text of QC 1000 or such other
standards, rules, and forms.
The new effective date would apply to the following standards,
rules, and forms:
New quality control standard QC 1000, A Firm's System of
Quality Control;
New PCAOB Rule 3400, Quality Control Standards;
New PCAOB Rule 2203A, Report on the Evaluation of the
Firm's System of Quality Control, and new PCAOB Form QC;
Amended and retitled AS 2901, Responding to Engagement
Deficiencies After Issuance of the Auditor's Report (formerly
Consideration of Omitted Procedures After the Report Date);
New ethics standard EI 1000, Integrity and Objectivity;
New AS 1310, Notification of Termination of the Auditor-
Issuer Relationship (recodifying SEC Practice Section (``SECPS'') Sec.
1000.08(m) and applying the requirements to all registered public
accounting firms and all issuer engagements); and
Amendments to AS 1215, Audit Documentation; AS 1220,
Engagement Quality Review; AS 2101, Audit Planning; AS 2110,
Identifying and Assessing Risks of Material Misstatement; AS 2201, An
Audit of Internal Control Over Financial Reporting That Is Integrated
with An Audit of Financial Statements; AS 2315, Audit Sampling; AS
4105, Reviews of Interim Financial Information; Attestation Standard
No. 1, Examination Engagements Regarding Compliance Reports of Brokers
and Dealers; Attestation Standard No. 2, Review Engagements Regarding
Exemption Reports of Brokers and Dealers; AT Section 101, Attest
Engagements; ET Section 101, Independence; ET Section 191, Ethics
Rulings on Independence, Integrity, and Objectivity; Rule 2204,
Signatures; Rule 2205, Amendments; Rule 2206, Date of Filing; Rule
3500T, Interim Ethics and Independence Standards; Form 1, Application
for Registration; Form 2, Annual Report Form; and Instructions to Form
AP, Auditor Reporting of Certain Audit Participants.
The proposed rule change would also delay the effective date of the
rescission of (i) Rule 3400T, Interim Quality Control Standards; (ii)
ET Section 102, Integrity and Objectivity; and (iii) AS 1110,
Relationship of Auditing Standards to Quality Control Standards, to
December 15, 2026.
Until Rule 3400T is rescinded on December 15, 2026, the following
interim quality control standards will remain in effect: QC Section 20,
System of Quality Control for a CPA Firm's Accounting and Auditing
Practice; QC Section 30, Monitoring a CPA Firm's Accounting and
Auditing Practice; QC Section 40, The Personnel Management Element of a
Firm's System of Quality Control-Competencies Required by a
Practitioner-in-Charge of an Attest Engagement; SECPS Sec. 1000.08(d),
Continuing Professional Education of Audit Firm Personnel; SECPS Sec.
1000.08(l), Communication by Written Statement to all Professional
Personnel of Firm Policies and Procedures on the Recommendation and
Approval of Accounting Principles, Present and Potential Client
Relationships, and the Types of Services Provided; SECPS Sec.
1000.08(m), Notification of the Commission of Resignations and
Dismissals from Audit Engagements for Commission Registrants; SECPS
Sec. 1000.08(n), Audit Firm Obligations with Respect to the Policies
and Procedures of Correspondent Firms and of Other Members of
International Firms or International Associations of Firms; SECPS Sec.
1000.08(o), Policies and Procedures to Comply with Independence
Requirements; SECPS Sec. 1000.38, Appendix D--Revised Definition of an
SEC Client; SECPS Sec. 1000.42, Appendix H--Illustrative Statement of
Firm Philosophy; SECPS Sec. 1000.43, Appendix I--Standard Form of
Letter Confirming the Cessation of the Client-Auditor Relationship;
SECPS Sec. 1000.45, Appendix K--SECPS Member Firms With Foreign
Associated Firms That Audit SEC Registrants; and SECPS Sec. 1000.46,
Appendix L--Independence Quality Controls.
II. Board's Statement of the Purpose of, and Statutory Basis for, the
Proposed Rules
In the Board's filing with the Commission, the Board described the
purpose of, and basis for, the proposed rule change. The text of these
statements may be examined as specified in Item IV below. The Board has
prepared summaries, set forth in sections A, B, and C below, of the
most significant aspects of such statements.
A. Board's Statement of the Purpose of, and Statutory Basis for, the
Proposed Rules
(a) Purpose
In the Board's May 24, 2024 Form 19b-4 filing seeking Commission
approval of the new and amended standards, rules, and forms identified
in Item I above, the Board stated that, if approved by the SEC, those
standards, rules, and forms would take effect on December 15, 2025
(with initial evaluations of quality control systems to be performed as
of September 30, 2026, and initial reporting to the PCAOB on PCAOB Form
QC by November 30, 2026). Firms would have been permitted at any point
following SEC approval to elect to comply with the requirements of QC
1000 before the December 15, 2025 effective date (except as to
reporting to the PCAOB on the evaluation of the quality control
system). The Commission approved the new and amended standards, rules,
and forms on September 9, 2024. See Public Company Accounting Oversight
Board; Order Granting Approval of QC 1000, A Firm's System of Quality
Control, and Related Amendments to PCAOB Standards, Rules, and Forms,
SEC Rel. No. 34-100968 (Sept. 9, 2024).
During the rulemaking process, the Board sought and received
comments on the appropriate effective date. When the Board adopted the
new and amended standards, rules, and forms identified in Item I above,
the Board stated its belief, taking into account those comments, that a
December 15, 2025 effective date would strike an appropriate balance
between the benefits to investors of having QC 1000 take effect as
promptly as practicable, while allowing sufficient time for registered
public accounting firms to design and implement robust, QC 1000-
compliant quality control systems.
As the effective date approaches, however, the Board has needed to
consider information, from various sources, to the effect that some
firms have encountered implementation challenges that may, as a
practical
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matter, be insurmountable within the established time frame.
Having considered that information, the Board delayed the effective
date of the new and amended standards, rules, and forms described in
PCAOB Release No. 2024-005 for one year, to December 15, 2026 (with
initial evaluations of quality control systems to be performed as of
September 30, 2027, and initial reporting to the PCAOB on PCAOB Form QC
by November 30, 2027). The Board stated that it believes that an
additional year is sufficient time for firms that have encountered
implementation challenges to overcome those challenges. In adopting the
proposed rule change, the Board considered the potential costs
associated with a one-year delay of the effective date--which would
postpone the benefits to investors and other stakeholders from having
the new and amended standards, rules, and forms in effect--and the
significant costs that could result from incomplete or faulty
implementation of the new requirements if firms were not allowed
sufficient time to comply.
The Commission previously determined that the new and amended
standards should apply to audits of emerging growth companies
(``EGCs''), as that term is defined in Section 3(a)(80) of the
Securities Exchange Act of 1934. The Board does not believe that an
additional determination is necessary in order for the proposed rule
change, which merely postpones the effective date for the new and
amended standards, rules, and forms, to apply to the audits of EGCs.
(b) Statutory Basis
The statutory basis for the proposed rule change is Title I of the
Act.
B. Board's Statement on Burden on Competition
The Board does not believe that the proposed rules would result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of Title I of the Act.
C. Board's Statement on Comments on the Proposed Rules Received From
Members, Participants or Others
The Board did not solicit or receive written comments on this
proposed rule change.
III. Date of Effectiveness of the Proposed Rules and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Securities Exchange Act of 1934 and paragraph (f) of
Rule 19b-4 thereunder. At any time within 60 days of the filing of the
proposed rule change, the Commission summarily may temporarily suspend
such rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of Title I of
the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed
rules are consistent with the requirements of Title I of the Act.
Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/pcaob); or
Send an email to [email protected]. Please include
PCAOB-2025-01 in the subject line.
Paper Comments
Send paper comments in triplicate to Vanessa A.
Countryman, Secretary, Securities and Exchange Commission, 100 F Street
NE, Washington, DC 20549-1090.
All submissions should refer to PCAOB-2025-01. This file number should
be included on the subject line if email is used. To help the
Commission process and review your comments more efficiently, please
use only one method of submission. The Commission will post all
comments on the Commission's internet website (https://www.sec.gov/rules/pcaob). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rules that are filed
with the Commission, and all written communications relating to the
proposed rules between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing on the
Commission's internet website (https://www.sec.gov/rules/pcaob). Copies
of such filing will also be available for inspection and copying at the
principal office of the PCAOB. Do not include personal identifiable
information in submissions; you should submit only information that you
wish to make available publicly. The Commission may redact in part or
withhold entirely from publication submitted material that is obscene
or subject to copyright protection. All submissions should be submitted
on or before September 24, 2025.
For the Commission, by the Office of the Chief Accountant,
pursuant to delegated authority.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2025-16826 Filed 9-2-25; 8:45 am]
BILLING CODE 8011-01-P