PCAOB Sets Internal Control Reviews
The Public Company Accounting Oversight Board today voted 5 to 0 to require auditors to review corporations' internal controls when auditing their financial statements

"Audit fees will almost certainly increase, to some extent, as a result" of the standard adopted by the board, said board member Dan Goelzer, according to Reuters. But board members were unanimous that higher audit costs were worthwhile to make financial statements more reliable. Board member Kayla Gillan warned audit firms, however, that the new standard "is not an excuse to price gouge" their clients.

Under the new standard, auditors who routinely review public companies' books also would have to review how companies ensure their books are accurate and reliable. In some cases, that would require tracing financial transactions from start to finish, expanding the workload of auditors. Goelzer called the standard "a sea change in the scope and work of public company auditors," according to Reuters.

Dow Jones reported that the board decided to hold in place a requirement that auditors judge the effectiveness of audit committee members who have the power to hire and fire them. Although oversight board members conceded that creates some potential conflicts of interest, they didn't retreat from the plan. Whenever auditors find problems with audit committees, the final rule requires they report it to the full board.

More at the PCAOB.