In a recent opinion piece published in CFO Dive, Brian Croteau, Chief Auditor at PwC US, offered a warning about the US Public Company Accounting Oversight Board's (PCAOB) proposal that external auditors should take responsibility for detecting regulatory and legal noncompliance.
In June 2023, the PCAOB proposed a new auditing standard focused on Noncompliance with Laws and Regulations (referred to as the "NOCLAR" standard). NOCLAR would require auditors to identify — and even prevent — their clients' noncompliance with a wide range of laws. "This is in contrast to current standards today, where auditors focus on laws and regulations that have a direct and material impact on a company's financial statements," Croteau explained.
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