[Global Financial Insights] PCAOB Delays Implementation Of QC 1000 Standards

[2025] 178 taxmann.com 98 (Article)

Global Financial Insights is a weekly feature for the Accounts and Audit Module subscribers of Taxmann.com. It provides you with the latest updates on financial reporting and auditing practices from across the globe. Here is this week’s financial update:-

1. PCAOB delays implementation of QC 1000 and related standards, rules, and forms

The Public Company Accounting Oversight Board (PCAOB) has announced a one-year postponement of the effective date for QC 1000, A Firm’s System of Quality Control, along with other new and amended standards, rules, and forms originally adopted on May 13, 2024. The new effective date is now December 15, 2026. The related rescission of certain existing rules and standards has also been delayed.

When QC 1000 was adopted, the Board viewed a 2025 effective date as a balanced approach, ensuring timely benefits for investors while giving firms adequate preparation time. However, feedback indicated that some firms faced significant implementation challenges that could not reasonably be resolved within the initial timeline. The PCAOB stated that the additional year should provide sufficient time for firms to address these issues.

Importantly, no changes have been made to the text of the standards, rules, or forms as adopted in May 2024. Registered firms may still elect early compliance with QC 1000, except for the requirement to report to the PCAOB on their evaluation of the quality control system.

Source – Public Company Accounting Oversight Board

2. IAASB adopts new definition of publicly traded entity in line with IESBA Code of Ethics

The International Auditing and Assurance Standards Board (IAASB) has issued narrow-scope amendments to its standards, revising the definition of a listed entity to align with the International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional Accountants. These changes update the International Standards on Quality Management (ISQMs) and International Standards on Auditing (ISAs) and introduce amendments to ISRE 2400 (Revised). The revisions aim to ensure consistency in independence requirements and enhance transparency through public disclosures, particularly for engagements involving publicly traded and public interest entities.

Key changes include:

(a) Aligns the definition of Publicly Traded Entity (PTE) in ISQMs and ISAs with the IESBA Code of Ethics.
(b) Recognizes local regulators’ role in defining PTEs for their jurisdictions.
(c) Extends existing audit requirements for listed entities to PTEs.
(d) Introduces a framework for applying differential requirements to other entities.
(e) Adds a new ISRE 2400 (Revised) requirement for public disclosure when independence rules are applied to certain entities.

The IAASB collaborated extensively with the IESBA to harmonize key principles and maintain consistency between their respective standards while developing these amendments.

The amendments will be effective for engagements covering periods beginning on or after December 15, 2026, in line with the implementation of the IAASB’s recently revised standards on going concern (ISA 570 Revised 2024) and fraud (ISA 240 Revised).

Source – International Auditing and Assurance Standards Board

Click Here To Read The Full Story