GAO Goes After PCAOB on Audit Risk Disclosure

The Government Accountability Office has criticized the Public Companies Acccounting Oversight Board for its risk assessment audit standards. GAO says that the new standards could confuse auditors and unnecessarily push audit costs higher. Last year, PCAOB's chairman essential to user confidence and bedrock for future standards. CPA firms are mixed with PWC and BDO Seidman approving of the standards while McGladrey Pullen and Patrick Montgomery,CPA criticizing the standard.

Auditors need to assess risk to plan an effective audit and to evaluate internal control effectively--perhaps for other reasons as well. GAO's criticism indicates an opportunity for academic researchers to ascertain the effectiveness of the PCAOB audit standards.