On February 26, 2024, the PCAOB reopened the comment period, through March 18, 2024, for its proposal to amend PCAOB auditing standards related to an auditor’s responsibility for considering a company’s noncompliance with laws and regulations (NOCLAR), announcing that it would host a public virtual roundtable on March 6, 2024 regarding the NOCLAR proposal to obtain additional insight from participants. The NOCLAR proposal, if adopted, would establish specific requirements for a company’s auditor to “(i) plan and perform procedures to identify the laws and regulations with which noncompliance could reasonably have a material effect on the financial statements, (ii) assess and respond to risks of material misstatement of the financial statements due to noncompliance with those laws and regulations, and (iii) identify whether there is information indicating that noncompliance with those laws and regulations has or may have occurred.”

A significant number of comment letters have been submitted in response to the NOCLAR proposal, with commenters citing concerns regarding the expansion of the scope of audits beyond an audit of historical financial statements and the potential for confusion regarding the appropriate role of auditors, among others. The NOCLAR proposal was issued on June 6, 2023, followed by a 60-day comment period that originally closed on August 7, 2023.

The PCAOB’s news release is available here.

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