On March 6, 2024, Lynn Turner participated in a Virtual Roundtable, held by the Public Company Accounting Oversight Board (“PCAOB”), regarding the proposal to amend PCAOB auditing standards related to auditors’ responsibility to consider a company’s noncompliance with laws and regulations (“NOCLAR”).

The first panel of the Roundtable discussed (1) the threshold for identification of laws and regulations and (2) the proposal to eliminate the distinction of direct illegal acts vs. indirect illegal acts.

The second panel discussed (1) considerations for an auditor’s assessment of noncompliance and other legal considerations including competence to do so and (2) concerns regarding potential waiver of attorney-client privilege.

The third and final panel discussed the economic impact of the PCAOB proposal, including the benefits to investors and costs of implementing the standard.

Participants at the Roundtable included a broad base of interested parties, including investor representatives, partners from the largest CPA firms, academics, representatives of the business community and corporate boards, and former regulators. The robust discussions provided valuable input to the PCAOB on these issues.

The PCOAB has reopened the comment period for this proposal until March 18 and encourages submissions.

A replay of this meeting can be found here: https://pcaobus.org/news-events/events/event-details/pcaob-staff-virtual-roundtable-on-noclar-proposal