The Public Company Accounting Oversight Board (PCAOB) has approved new professional standards for independent auditors that are necessary under Section 404 of the Sarbanes-Oxley Act.
Section 404 requires the management of a public company to measure the effectiveness of the company's internal controls over financial reporting. It also requires the PCAOB to define rules governing how accounting firms will audit their corporate clients' internal controls when reviewing their financial statements.
The auditing standard is subject to the approval of the SEC and will update the PCAOB's current interim standards on auditing, attestation, and independence. New rules include the barring of auditors from providing internal-control-related services to the audit client unless it has been specifically pre-approved by the audit committee.
The PCAOB standard has the same start date as Section 404 ? now for fiscal years ending on or after November 15 2004.
The board changed the registration deadline for non-US accounting firms from the previous deadline of April 19 to July 19 2004.