FEI Comments On PCAOB Preliminary Staff Views On Small Co Audits
December 14, 2007
FEI Summary

On Dec. 14, 2007, FEI's Small and Mid-size Public Companies Committee (SMPCC) sent a comment letter to the Public Company Accounting Oversight Board (PCAOB) expressing its views on the PCAOB's Preliminary Staff Views (PSV) released Oct. 17, 2007 on, "An Audit of Internal Control That is Integrated with An Audit of Financial Statements: Guidance for Auditors of Smaller Public Companies."

The letter, signed by FEI SMPCC Chair Karen Rasmussen, said, "In general, we strongly support the PSV’s emphasis of five major areas where smaller, less complex companies may achieve the objectives of internal control differently from large, complex companies. These are: use of entity-level controls, risk of management override, implementation of segregation of duties and alternative controls, use of information technology, maintenance of financial reporting competencies (which the PSV helpfully notes may include consideration of third party assistance) and nature and extent of documentation."

However, FEI SMPCC's letter recommended the PSV be less prescriptive with respect to defining the "precision"  of entity-level controls.

Prepared Dec. 14, 2007 by Serena Davila, Director, Technical Activities, Financial Executives International (FEI). This summary does not represent FEI opinion unless specifically stated above.