What We Have Learned and Future Directions (cont?d)

What We Have Learned and Future Directions (cont’d)

• We strongly support the concepts behind section 404. However, we believe that economies and efficiencies can be gained in the process through:

  • Auditor and management efficiencies and streamlining in the second year and beyond
  • Better integration of the financial audit and internal control audit
  • Additional PCAOB and SEC guidance that provides for a risk-based approach using reasoned risk and experience-based auditor judgments in areas such as rotation of testing and additional flexibility in using the work of others (similar to the approach in GAO’s Financial Audit Manual).
  • Ongoing feedback from the PCAOB inspection process

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