PCAOB Adopts Strategy to Monitor & Analyze Audit Firms' Business Models

December 10, 2015 RECENT DEVELOPMENTS

In its most recently adopted budget and strategic plan, the PCAOB, among many other objectives related to independence and audit quality, included a goal to study firms’ business models to determine whether those models pose risks to audit quality.  Based on their findings, the Board may consider policy options to mitigate the risks.  The Board will also report on the evolution and structure of the firms’ services and whether the multidisciplinary model has a negative effect on independence and audit quality.  In monitoring approaches to enhancing independence, objectivity and professional skepticism, the Board will also closely follow developments in the EU, which adopted a mandatory firm rotation requirement that goes into effect in 2016.