Choosing your auditing standard is more than a compliance task; it’s a strategic decision that signals your company’s ambitions. For most businesses, this comes down to a key question: PCAOB vs AICPA? While the vast majority of private companies follow AICPA standards, a growing number are strategically opting for the rigor of PCAOB rules, even when it’s not required. Why go the extra mile? It’s about preparing for an IPO, attracting serious institutional investors, or building unshakable trust before a sale. This guide will help you understand the fundamental differences between these two frameworks so you can determine which standard aligns with your company’s long-term vision and financial goals.
Key Takeaways
- Match the Standard to Your Business Stage: While public companies must use PCAOB standards, private companies have a choice. Sticking with AICPA is the norm, but strategically adopting the more rigorous PCAOB rules can prepare your business for an IPO or make it more attractive to serious investors.
- Expect a Deeper Dive with PCAOB Audits: A PCAOB audit goes beyond a standard financial review. It requires a formal opinion on your internal controls, demands significantly more detailed documentation, and includes public disclosure of the most complex audit areas, known as Critical Audit Matters (CAMs).
- View the Audit as a Strategic Investment: The higher cost of a PCAOB audit reflects its intensity. Think of this not just as an expense, but as an investment in your company’s future that builds credibility and gets your financial house in order for major growth.
PCAOB vs. AICPA: What’s the Difference?
If you’re running a business, the world of accounting standards can feel like alphabet soup. Two acronyms you’ll hear a lot are PCAOB and AICPA. While they both set the rules for financial audits, they operate in different arenas and have distinct goals. Understanding the difference isn’t just for accountants—it’s crucial for any business leader who needs to navigate financial reporting, especially if you’re considering going public or seeking investment. Getting this right from the start helps you build a solid foundation for financial integrity and stakeholder trust.
Think of it this way: the PCAOB is the regulator for public companies, the ones traded on the stock market. Its rules are mandatory and designed to protect the public interest by ensuring transparency and accuracy. The AICPA, on the other hand, is the professional body that sets the standards for private companies, non-profits, and government entities. While its standards are considered the gold standard for private entities, they offer a bit more flexibility. Knowing which set of rules applies to your company will shape your entire audit process, influence costs, and impact how you present your financial health to investors, lenders, and other stakeholders. Let’s break down who these organizations are and what they do.
Meet the PCAOB: Public Company Accounting Oversight Board
The Public Company Accounting Oversight Board (PCAOB) is a nonprofit corporation established by Congress to oversee the audits of public companies. Think of it as the chief watchdog for the auditors of businesses whose stock is traded publicly. Its rules aren’t suggestions—they’re mandatory for these companies. The PCAOB’s primary mission is to protect investors and the public by making sure audit reports are accurate, independent, and clear. By holding audit firms to a high standard, it works to improve the overall quality of audits and build greater trust in the financial markets. This focus on public protection is what drives its rigorous inspection and enforcement activities.
Meet the AICPA: American Institute of Certified Public Accountants
The American Institute of Certified Public Accountants (AICPA) is the world’s largest member association representing the accounting profession. Unlike the government-created PCAOB, the AICPA is a professional organization for accountants. It sets ethical standards for the profession and develops the auditing standards for private companies, non-profits, and government entities. Its Auditing Standards Board (ASB) is responsible for creating the requirements that ensure audits are performed consistently and according to the best practices in the profession. The AICPA also plays a huge role in training and certifying accountants, including developing and grading the CPA Exam. Its guidance is the foundation of auditing for most businesses in the U.S.
Which Standards Apply to Your Business?
Figuring out which auditing standards to follow can feel complicated, but it usually comes down to one key question: Is your company public or private? The answer determines your starting point and which set of rules your auditors will use. Let’s break down what this means for your business and how your long-term goals might influence your decision.
Public Companies: Following PCAOB Rules
If your company’s stock is publicly traded, the choice is made for you. You must follow the rules set by the Public Company Accounting Oversight Board (PCAOB). Congress established the PCAOB to oversee the audits of public companies, protecting investors and the public interest. These standards are rigorous and mandatory, designed to ensure the highest level of accountability and transparency in financial reporting. Think of it as the required standard for playing in the public market. Your audit and assurance services provider must be registered with the PCAOB to perform this work.
Private Companies: Adhering to AICPA Standards
For most private companies, the auditing playbook is written by the American Institute of Certified Public Accountants (AICPA). The AICPA is the world’s largest member association for the accounting profession, and it sets the professional and ethical standards for private company audits. These guidelines, known as Generally Accepted Auditing Standards (GAAS), are comprehensive and respected globally. They provide a solid framework for a thorough and reliable audit, giving your stakeholders confidence in your financial statements. This is the standard path for private businesses, from startups to established family-owned enterprises.
Why a Private Company Might Opt for PCAOB Standards
Sometimes, a private company chooses to level up its audit. While not required, opting for an audit under PCAOB standards can be a powerful strategic move. Why go the extra mile? It often comes down to future plans. If you’re thinking about an IPO, undergoing a PCAOB audit gets your financial house in order for the public market. It can also make your company more attractive if you’re planning to sell, especially to a public company. Ultimately, it signals a higher level of financial discipline and can build significant trust with investors, lenders, and potential partners.
Key Differences in Auditing Standards
At first glance, an audit is an audit. The goal is always to provide an independent opinion on a company’s financial statements. But how an auditor gets to that opinion can look very different depending on whether they’re following PCAOB or AICPA standards. Think of it like two different roadmaps to the same destination—the routes, rules of the road, and required stops along the way are distinct.
These differences aren’t just for accountants to worry about; they impact the scope, cost, and outcome of your audit. The PCAOB’s framework, designed to protect public investors, is generally more rigid and demanding. It requires a deeper dive into specific areas, more extensive documentation, and greater transparency in the final report. The AICPA’s standards, which apply to private companies, are built to be more flexible, allowing auditors to tailor their approach based on the company’s size and complexity. Understanding these key distinctions will help you anticipate what to expect and prepare your team for a smoother process.
Documentation: How Strict Are the Rules?
If you’ve ever been told to “show your work” on a math problem, you have a good sense of the PCAOB’s approach to documentation. PCAOB standards require auditors to create a detailed, comprehensive record of every step taken, every piece of evidence examined, and every conclusion reached. The idea is that another experienced auditor should be able to pick up the file and understand exactly what was done and why. This level of detail is non-negotiable. In contrast, AICPA standards also require thorough documentation, but they offer more flexibility, allowing auditors to use their professional judgment to determine the extent of the records needed to support their findings.
Reporting on Critical Audit Matters (CAMs)
One of the most significant differences you’ll see in a final audit report is the inclusion of Critical Audit Matters, or CAMs. A PCAOB requirement, CAMs are the most challenging, subjective, or complex areas the auditor dealt with during the audit. The auditor must identify these issues, explain why they were considered critical, and describe how they were addressed. This gives investors a transparent look into the audit’s toughest spots. AICPA standards for private companies do not require this level of public disclosure, so the final report is often more concise and focuses primarily on the overall opinion.
Testing Internal Controls
Internal controls are the processes and procedures you have in place to ensure your financial reporting is accurate and to prevent fraud. Under PCAOB standards, an audit of a public company is an integrated audit. This means the auditor must not only audit the financial statements but also perform a separate, in-depth evaluation of the effectiveness of your company’s internal controls over financial reporting. They then issue a formal opinion on those controls. For most private companies, an AICPA audit doesn’t require this separate opinion. While the auditor will still assess your controls to plan their audit strategy, the testing is typically less extensive.
Assessing Risk: Two Different Approaches
Ultimately, the differences between the two sets of standards come down to their core purpose. The PCAOB was created by Congress to oversee the audits of public companies and protect the interests of investors. Its rules are prescriptive, strict, and backed by serious enforcement power. The goal is to build public trust and ensure consistency in the capital markets. The AICPA, on the other hand, is a professional organization that sets ethical and performance standards for its members. Its auditing standards are designed to provide a flexible framework that can be adapted to a wide variety of private entities, from small non-profits to large, family-owned corporations.
How Each Organization Enforces Its Rules
Understanding the standards is one thing, but knowing how they’re enforced is another. The PCAOB and AICPA take very different approaches to ensuring firms stay compliant, which directly impacts the intensity and focus of the audit process. Think of it as the difference between a scheduled inspection from a government agency and a collaborative review by your industry peers. Both aim to uphold quality, but their methods and authority are worlds apart. This distinction is key because it shapes the auditor’s mindset and the level of scrutiny your business will face.
PCAOB: Inspections and Penalties
The PCAOB acts as a true regulator with significant enforcement power. It doesn’t just set the rules; it actively checks to make sure firms are following them through a rigorous inspection process. The PCAOB conducts inspections of registered public accounting firms to assess their compliance with its standards and rules. Firms that audit more than 100 public companies get inspected every year, while firms auditing fewer than 100 are inspected at least once every three years. If inspectors find serious issues or violations, the PCAOB can impose hefty penalties, including fines and sanctions, holding firms directly accountable for the quality of their work.
AICPA: Peer Reviews and Professional Conduct
The AICPA, on the other hand, doesn’t have the same kind of governmental enforcement authority. Instead, it relies on a system of peer reviews to maintain quality control. In this model, CPA firms evaluate each other’s compliance with AICPA standards. This process is generally less adversarial than a PCAOB inspection and is more focused on education and ensuring firms adhere to professional best practices. While it’s a crucial part of maintaining high standards within the profession, it’s fundamentally a self-regulatory mechanism rather than an external enforcement action. The goal is to help firms improve and uphold their commitment to professional conduct.
Who Holds Whom Accountable?
So, where does the buck stop? The PCAOB has clear, direct authority to enforce its standards through its inspection and disciplinary system. This structure makes it the primary body holding public accounting firms accountable for their audit practices, especially for audits of publicly traded companies. The AICPA’s peer review system is essential for quality control among firms auditing private entities, but it lacks the same enforcement power. This difference underscores the PCAOB’s critical role in protecting investors by ensuring the integrity of public company audits, while the AICPA focuses on upholding the standards of the profession as a whole.
Common Hurdles in PCAOB Compliance
Transitioning to PCAOB standards is a significant step, and it’s smart to go in with your eyes open. While the benefits are clear, especially for companies with public ambitions, the path isn’t without its challenges. Understanding these common hurdles ahead of time helps you prepare your team and your resources, making the entire process smoother. Let’s walk through the main challenges you can expect.
Managing Higher Costs and Complexity
PCAOB audits are known for being more expensive and complex than their AICPA counterparts, and for good reason. The standards demand a deeper level of scrutiny and more extensive procedures from your audit team. This translates to more hours, which naturally affects the cost. But the expense isn’t just about the auditor’s invoice. You’ll also need to invest more internal time and resources to prepare for the audit and respond to requests. Think of it as a shift from a standard check-up to a full diagnostic exam. The goal is to provide a higher level of assurance to investors, which requires a more rigorous process from everyone involved. The increased complexity is a direct result of the detailed rules designed to protect the public interest.
Meeting Stricter Error Standards
One of the biggest adjustments for companies moving to PCAOB standards is the lower tolerance for errors. What might be considered an insignificant issue in an AICPA audit could be flagged as a significant deficiency or even a material weakness under PCAOB rules. The threshold for what constitutes a “mistake” is simply much lower, and the consequences are more serious. This heightened standard puts a spotlight on the strength of your internal controls over financial reporting. It means your team needs to be incredibly diligent about accuracy and documentation throughout the year, not just during audit season. Your processes for recording transactions, reconciling accounts, and preparing financial statements will be tested with a fine-tooth comb.
Handling Intensive Documentation and Testing
Get ready for your paperwork to get a major upgrade. PCAOB audits require a level of documentation that often goes beyond what private companies are used to. Your auditors will need to build a much more detailed file to support their conclusions, which means they’ll be asking your team for more evidence. They are also required to perform more extensive testing. For example, PCAOB standards require auditors to dig deeper with their questions as part of their risk assessment. This isn’t about creating busy work; it’s about creating a clear, defensible audit trail that proves every number and assertion has been thoroughly vetted. For your business, this means having robust systems in place to capture and organize this information efficiently.
Allocating the Right Resources
Successfully completing a PCAOB audit isn’t a task you can delegate to one person. It requires a coordinated effort and the right resources. Management needs to ensure the finance and accounting teams have the bandwidth to handle the extra requests from auditors without letting their daily responsibilities slide. This might mean bringing in temporary help or investing in technology to automate certain processes. More importantly, it means planning ahead. If your company is considering going public or is required to adopt PCAOB standards, you should start the conversation with your auditor early. This gives you time to identify potential gaps in your team or systems and address them long before the audit begins.
Comparing the Costs: PCAOB vs. AICPA Audits
Let’s talk about the bottom line. When you’re deciding between a PCAOB and an AICPA audit, cost is a huge factor. It’s easy to see the higher price tag on a PCAOB audit and wonder if it’s worth it, especially for a private company. But the cost isn’t just about the final invoice; it’s about the time, resources, and internal effort required from your team. Think of it less as an expense and more as an investment in your company’s financial integrity and future.
PCAOB audits are generally more expensive and time-consuming because they are designed to protect public investors, which means the rules are much stricter. The process involves more detailed testing, deeper scrutiny of internal controls, and significantly more documentation. This added rigor requires more hours from your audit team, which naturally leads to higher fees. Understanding where these costs come from can help you make a more informed decision that aligns with your budget and your business goals.
Audit Fees and Time Commitments
There’s no getting around it: PCAOB audits typically cost more and take longer than AICPA audits. The main reason is the sheer complexity and scope. Because PCAOB standards are designed for public companies, they demand a more intensive examination of your financial statements and internal controls. This means your auditors will spend more time on-site, conduct more extensive testing, and engage in more back-and-forth with your team.
This increased time commitment directly translates to higher audit fees. Your company will also need to dedicate more internal resources to support the audit process, from preparing documentation to answering auditor inquiries. While the investment is significant, the result is a higher level of assurance that can be critical if you’re planning to attract major investors or go public.
The Price of Documentation and Compliance
A huge driver of the cost difference comes down to one word: documentation. PCAOB audits require a much more extensive paper trail than AICPA audits. The rules are incredibly specific about what needs to be documented and how. Auditors must provide detailed evidence for every conclusion they draw, leaving very little room for interpretation. This meticulous process is designed to ensure the audit is thorough and can stand up to regulatory inspection.
On top of that, PCAOB standards have a lower threshold for what’s considered a significant error. This means auditors have to investigate smaller discrepancies that might be considered immaterial in an AICPA audit. This strictness forces a deeper dive into your transactions and processes, which requires more time and, consequently, a larger budget to cover the compliance effort.
Looking at the Long-Term Financial Impact
While a PCAOB audit has a higher upfront cost, it’s important to consider the long-term financial implications. If your company has ambitions to go public, undergoing a PCAOB audit sooner rather than later can be a smart strategic move. It prepares your team and processes for the rigorous requirements of the public market, potentially saving you from costly surprises and delays down the road.
For private companies seeking funding from venture capital or private equity, a PCAOB-compliant audit can also build significant credibility. It signals to investors that your financials are solid and that you’re committed to a high level of transparency and governance. Choosing the right audit standard is really about aligning your immediate budget with your long-term business goals.
Investing in Technology and Team Training
The right audit firm can help manage costs and add value by leveraging technology. Modern firms use data analytics, artificial intelligence, and cloud-based platforms to streamline the audit process. These tools can automate repetitive tasks, analyze large datasets for anomalies, and improve communication between your team and the auditors. This efficiency can help offset some of the higher costs associated with PCAOB-level scrutiny.
When choosing an auditor, ask about their tech stack. A firm that invests in emerging technologies and ongoing team training is better equipped to handle a complex audit efficiently. This not only provides a smoother experience but also delivers deeper insights into your business operations, turning a compliance requirement into a valuable business tool.
Choosing the Right Audit Standard for Your Private Company
Deciding between AICPA and PCAOB standards isn’t just a compliance task—it’s a strategic business decision. While most private companies stick with AICPA standards, there are compelling reasons why yours might choose the more rigorous PCAOB path. Thinking through your company’s long-term goals, from funding rounds to a potential public offering, will help you determine which standard aligns best with your vision. Let’s walk through the key factors to consider.
Building Credibility with Investors
If you’re looking to attract serious investors or position your company for a future sale, a PCAOB audit can be a powerful signal of your commitment to financial integrity. Think of it as the gold standard for financial reporting. A private company might choose a build more trust with investors or prepare for a major transaction. Adhering to these stricter public company standards shows potential partners that your financial house is in order and that you’re ready for the highest level of scrutiny. It demonstrates a proactive approach to governance and transparency, which can make your company a more attractive opportunity for outside capital.
Balancing Complexity and Transparency
Opting for a PCAOB audit isn’t a decision to take lightly, as it comes with a significant trade-off. PCAOB audits are generally more complex and costly because they demand more detailed paperwork and follow stricter rules. This increased rigor provides greater transparency, but it also requires more time and resources from your team. You’ll need to weigh whether the benefits of enhanced credibility justify the higher audit fees and the internal effort needed to meet these demanding standards. It’s a classic cost-benefit analysis where you have to decide if the investment in a more intensive audit process will deliver a worthwhile return for your specific goals.
Factoring in Your Industry’s Needs
Your industry can also play a big role in this decision. PCAOB audits are designed to protect investors in public companies by ensuring financial reports are exceptionally accurate. If you operate in a sector with heavy regulation or where stakeholders are accustomed to public company-level reporting—like fintech, biotech, or government contracting—adopting PCAOB standards can be a strategic advantage. It aligns your business with industry best practices and can make it easier to secure partnerships, contracts, or funding within that ecosystem. Understanding the expectations of your specific industry is key to making the right choice.
Planning for a Future IPO
If an Initial Public Offering (IPO) is on your company’s long-term roadmap, adopting PCAOB standards early is one of the smartest moves you can make. Transitioning to these standards during the already intense IPO process can create significant delays and complications. By getting your systems and controls ready ahead of time, you streamline the path to going public. It prepares your team for the demands of a public company environment and shows potential underwriters and early investors that you are serious and well-prepared. This foresight can make the entire process of becoming a public company much smoother and more efficient.
Finding the Right Firm for Your Audit
Once you’ve decided which auditing standard is right for your company, the next step is to find a CPA firm that can meet your needs. This isn’t just about finding someone to check the boxes; it’s about partnering with a team that has the right credentials, experience, and tools to deliver a high-quality, efficient audit. When you’re vetting potential firms, especially for a PCAOB audit, there are a few key areas you’ll want to focus on.
The PCAOB Registration Rule
First things first: any accounting firm that performs an audit under PCAOB standards must be registered with the Public Company Accounting Oversight Board. This isn’t optional—it’s a foundational requirement. The PCAOB was created by Congress to oversee the audits of public companies, and its rules are mandatory for these businesses. When you start your search, confirming a firm’s PCAOB registration is the very first step. This ensures they are legally permitted to conduct your audit and are subject to the board’s oversight and inspection processes. Think of it as the baseline qualification before you consider anything else.
What to Look for in Auditor Qualifications
Beyond registration, you need a firm with deep experience in PCAOB audits. These audits are known for being more rigorous and demanding than those under AICPA standards, with a much stricter focus on public accountability. You’ll want a team that is not just familiar with the rules but has a proven track record of applying them effectively. Look for a firm that undergoes regular PCAOB inspections, as this demonstrates their commitment to maintaining high standards. An experienced partner can guide you through the complexities, help you prepare for the higher level of scrutiny, and provide the expert assurance services your business needs to build trust with stakeholders.
Why Tech Capabilities Matter
The auditing field is undergoing a major shift, driven by powerful new technologies. A modern firm should be using tools like artificial intelligence and advanced data analytics to make the audit process more efficient and insightful. These audit innovations allow auditors to analyze entire datasets instead of just samples, leading to a more thorough and accurate review. For you, this means a smoother audit experience, faster communication through client portals, and more valuable insights that go beyond a simple compliance check. When interviewing firms, always ask about the technology they use and how it benefits their clients. A forward-thinking firm leverages tech to deliver a better audit.
Common Myths About PCAOB and AICPA Standards
When it comes to accounting standards, a few common misunderstandings can trip up even the most seasoned business owners. Let’s clear the air and tackle some of the biggest myths surrounding PCAOB and AICPA audits so you can make informed decisions for your company.
Myth: PCAOB Rules Aren’t That Strict
It’s easy to assume that one set of accounting rules is much like another, but that’s not the case here. The idea that PCAOB standards are only slightly more rigorous than AICPA standards is a significant misconception. In reality, the PCAOB framework is far more stringent because it was created to protect public investors and maintain confidence in the public markets. This means audits under PCAOB standards involve a much deeper level of scrutiny, more extensive testing, and stricter documentation requirements. The board enforces these rules with real penalties, making compliance a serious matter for any company under its jurisdiction.
Myth: The Costs Are Always Predictable
If only audit costs were as simple as picking a service from a menu. Unfortunately, another common myth is that you can easily forecast the expenses for a PCAOB audit. Because these audits are more complex and demanding, they often take more time and, consequently, cost more than AICPA audits. The detailed paperwork, rigorous testing of internal controls, and stricter regulations all contribute to a longer engagement. Business owners should prepare for a more intensive process that can uncover issues requiring additional work, which can impact the final bill. Thinking of it as a fixed cost can lead to unwelcome surprises down the road.
Myth: Internal Control Opinions Are the Same
This is a critical distinction to understand. Many believe that the way auditors report on internal controls is the same under both standards, but they are fundamentally different. A key requirement of a PCAOB audit is that the auditor must provide an opinion on the effectiveness of your company’s internal controls over financial reporting. Additionally, the audit report must include a section on “Critical Audit Matters” (CAMs)—the most challenging and subjective issues from the audit. These elements are not standard in a typical AICPA audit, which adds another layer of scrutiny and transparency to the PCAOB process.
How to Prepare for Your Next Audit
A smooth audit doesn’t happen by accident—it’s the result of careful preparation. Whether you’re facing an AICPA or a more intensive PCAOB audit, getting organized ahead of time makes the process more efficient and less stressful for your team. By taking a few key steps, you can set your company and your auditors up for success, ensuring a clear and productive engagement. It’s about creating a clear path for your auditors to follow, which ultimately saves you time and resources.
Engage Your Auditor Early
Don’t wait until the last minute to bring your auditor into the loop. If your company is considering a major move, like an IPO, you should talk to your auditor as soon as possible. This early conversation allows them to incorporate some of the more rigorous PCAOB procedures into your regular audits. This proactive approach can save significant time and money down the road when you’re on a tight timeline. Think of it as a strategic head start. Building a strong relationship with your audit team from the beginning ensures they understand your business goals and can provide the best guidance. You can contact us to start the conversation long before your audit is scheduled.
Refine Your Documentation and Processes
A PCAOB audit is more demanding than one under AICPA standards, requiring a deeper level of scrutiny. This means your auditor will need more detailed evidence and support. Before the audit begins, take the time to review and strengthen your internal documentation and processes. Management should ensure the right people and resources are available to handle the auditor’s requests promptly. Having well-organized financial records, clear process documentation, and robust internal controls will make the entire audit process smoother. Our assurance services can help you identify areas for improvement and build a solid foundation for any level of audit scrutiny.
Keep Your Audit Committee in the Loop
Clear and consistent communication between your auditors and your audit committee is essential for a successful audit. This is especially true if your company is undergoing changes, such as preparing for an IPO, which often involves new members joining the committee. Your auditor may need to re-explain historical audit issues or complex accounting matters to new members to ensure everyone is on the same page. Fostering an open dialogue helps prevent misunderstandings and ensures your governance team is fully informed and aligned with the audit plan and its findings. This transparency builds trust and helps the audit process move forward without unnecessary delays.
Related Articles
- When Is a PCAOB Audit Required? Complete Guide | GuzmanGray
- What Is a PCAOB Registered Audit Firm? Explained
Frequently Asked Questions
Do I have a choice between PCAOB and AICPA standards for my audit? For public companies, there is no choice—you are required by law to follow PCAOB standards. For private companies, the default standard is set by the AICPA. However, a private company can strategically choose to undergo a more rigorous PCAOB audit, even though it isn’t required. This decision usually comes down to your long-term business goals.
Why would a private company voluntarily choose a more expensive PCAOB audit? It’s all about signaling a higher level of financial discipline and preparing for the future. If your company plans to go public, attract venture capital, or be acquired by a public company, a PCAOB audit gets your financial reporting ready for that level of scrutiny. It builds significant trust with potential investors and partners by showing them your financials can stand up to the toughest standards.
What’s the biggest day-to-day difference my team will experience during a PCAOB audit? The most noticeable difference will be the intensity of the process. Your team should expect a much higher volume of requests for documentation and evidence from the auditors. The process involves a deeper examination of your internal controls and a lower tolerance for errors. It requires more time and involvement from your finance staff to support the audit from start to finish.
Are PCAOB audits always more expensive, and if so, why? Yes, you can generally expect a PCAOB audit to have a higher price tag. The cost reflects the significant amount of additional work required from the audit firm. The standards demand more extensive testing, a formal opinion on the effectiveness of your internal controls, and incredibly detailed documentation. This all translates to more hours from the audit team, which is the primary driver of the higher cost.
If I think I need a PCAOB audit, what’s the most important thing to look for in an accounting firm? The absolute first step is to confirm that the firm is registered with the PCAOB, as this is a legal requirement. Beyond that, you want a partner with a proven track record of performing these specific audits. Ask about their experience, their inspection history with the PCAOB, and the technology they use to make the process more efficient. An experienced firm will not only ensure compliance but also guide you through the complexities smoothly.