Board Proposes Lighter Auditing of Internal Controls

Responding to complaints that the costs of the Sarbanes-Oxley Act were too high, the Public Company Accounting Oversight Board proposed a standard Tuesday aimed at allowing auditors to do less work — and charge less money — when assessing internal controls over financial reporting.
The changes would “eliminate unnecessary requirements while preserving the principles of the standard,” the chairman of the oversight board, Mark W. Olson, said.
The new rule, which is expected to be adopted this spring after public comment, is much shorter than the old standard, coming in at 65 pages rather than 180. It encourages auditors to use their judgment in deciding which internal controls should be reviewed, focusing on controls where the risk of significant misstatements is the highest.
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