SEC approves new audit quality benchmarks

The SEC has approved new accounting standards proposed by the PCAOB aimed at improving audit quality. The new standards, which come into force in December 2025, will require accounting firms to manage and monitor risks to audit quality and hold leadership accountable for compliance. The biggest audit firms – those that audit more than 100 public companies – will have to set up an oversight board that includes at least one independent outsider. SEC Chair Gary Gensler noted that the PCAOB had found that 46% of the auditing engagements it reviewed in 2023 “fell short of obtaining sufficient, appropriate audit evidence.”