Letters to Regulators: PCAOB Should Update “General Responsibilities” of Auditors, Address Climate Accounting Estimates and Assumptions

AFREF joined Public Citizen in responding to the Public Company Accounting Oversight Board’s request for comment on General Responsibilities of the Auditor in Conducting an Audit (AS 1000).

We commended the PCAOB for proposing to extend an auditor’s evaluation of fairness in AS 2810 beyond “mere technical compliance with the applicable financial reporting framework,” to more broadly “prohibit the financial statements and company disclosures from being materially misleading.” We urged PCAOB to specifically address climate-related accounting estimates and assumptions that obscure climate-related financial risk, like the use of unreasonable assumptions and estimates that could significantly change asset valuations and impairment testing, and the concealment of environmental liabilities and asset retirement obligations.

A PDF of the full letter can be found here.