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North America
PCAOB Chair Demetrios Logothetis has outlined plans to modernize the regulator’s inspection program, shifting its focus from reviewing individual audit engagements toward assessing firms’ overall quality control systems. He has also backed revisions to the PCAOB’s QC 1000 quality control standard, which is due to take effect in December 2026. The proposed changes would simplify compliance requirements, provide greater flexibility in assigning quality control responsibilities, remove the requirement for large firms to maintain an External QC Function, shorten documentation retention periods from seven to five years, and reduce certain reporting and evaluation obligations. The review comes amid significant changes in the accounting profession, including growing private equity investment in audit firms and rapid technological advances. Logothetis said the PCAOB must better understand how alternative ownership structures and evolving business models affect audit quality and independence.
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