Development of Accounting Promulgations Conduct an Internet search on responses
ID: 2488137 • Letter: D
Question
Development of Accounting Promulgations
Conduct an Internet search on responses to PCAOB notices (of proposed rules). You will find responses from various stakeholders to PCAOB notices.
Select one.
Examine the development of accounting promulgations by reviewing which stakeholders responded to a proposed rule. Analyze why they are interested in the proposed rule and how they may have an impact on the development process. Consider the phases in the process and how these groups have an impact on the final promulgation.
Review a response to a PCAOB notice of a proposed rule and analyze the competing influences of stakeholders in the development of accounting promulgations.
http://www.pwc.com/us/en/cfodirect/publications/comment-letter-pcaob.html
Explanation / Answer
We shall take PwC comments on PCAOB paper on estimates and fair value measurements
If we examine the development of this accounting promulgation which is on estimates and fair value measurements then we find that its related to standardisation of estimates and fair value measurements. It provides company management, third party, auditor and other stakeholders on estimates and fair value measurements are correct or not.
PwC is a CA firm and they are definitely interested in the proposed rule that its a very important thing while doing audit to consider with and it will have an great impact in the development process as auditors view is very important and there are many stakeholders who relies upon the report of auditor and if its correct then only its useful for the stakeholders otherwise it may prove a blunder. Because as per them that any enhancements to the existing auditing standards should be principles-based to adapt to the continuing evolution of accounting standards and estimates Therefore, we that enhancements to the related auditing standards should: Reflect the auditor’s risk assessment when determining the sufficiency and appropriateness of the· cumulative nature of audit evidence; Promote audit quality and work to narrow, or at least not expand, any expectation gap;· Consider the wide range of accounts that include some level of estimation uncertainty and the· varying levels of complexity and risk associated with different accounting estimates; Recognize that accounting estimates may be subject to a significant degree of measurement· uncertainty; and Be operational under the current and future constructs of the capital markets and relevant market· participants.
The phases of processes are involved right from evaluation of standards then The Board sought to give a wide variety of stakeholders the opportunity to provide input on standards as they are developed. Those stakeholders include investors, auditors, preparers of financial statements, other standard setters, regulators, and various interested parties.
The Board's Standing Advisory Group provides advice on the Board's standard-setting agenda and related matters. Additionally, the Board may use public roundtables, focus groups, and task forces to discuss certain topics relevant to its standard-setting activities. The Board also takes into account observations from its inspections of registered public accounting firm audits and other oversight activities as an integral part of standard setting.
The Board may, depending on the nature of the project, issue a concept release to solicit public comment prior to issuing a proposed standard. Typically, after the Board reviews the feedback received, it proceeds with development of a draft standard and related proposing release. After issuing the proposed standard and related release for public comment, the Board considers the comments and determines whether to adopt the proposed standard as final or repropose the standard for additional public comment. Once the standard has been adopted, the Board then submits it to the Securities and Exchange Commission for approval.
The SEC solicits public comment on the Board's standard and a decision is made whether to approve it. A PCAOB standard does not become effective unless and until it is approved by the SEC.
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