PCAOB Postpones Effective Date of New Quality Control Standard by One Year
August 28, 2025
The Public Company Accounting Oversight Board said Thursday that the effective date for its new quality control standard—QC 1000, A Firm’s System of Quality Control—which was slated for Dec. 15 of this year, will be pushed back until Dec. 15, 2026.
The announcement also postpones the other new and amended PCAOB standards, rules, and forms adopted by the board on May 13, 2024, as well as the related rescission date of certain rules and standards that are currently in force.
The PCAOB approved the updated quality control standard in May 2024. The new rules will require all PCAOB-registered accounting firms to identify their specific risks that would inhibit audit quality—like the use of technology-based auditing tools that could create new risks if they don’t work as intended or are used incorrectly—and design a quality control system that includes policies and procedures to guard against those risks.
In addition, accounting firms that audit more than 100 public companies annually would be required to establish an external oversight function, or EQCF, for the quality control system comprised of one or more professionals who can “exercise independent judgment,” the PCAOB said. The EQCF’s responsibilities should include, at a minimum, evaluating the significant judgments made and the related conclusions reached by the firm when evaluating and reporting on the effectiveness of its quality control system, the board noted.
In 2023, only 14 audit firms out of a total of more than 1,600 registered with the PCAOB met the 100-issuer-or-more threshold.
Firms will be required to annually evaluate their quality control system and report the results of their evaluation to the PCAOB on new Form QC, which would be certified by key firm personnel to reinforce individual accountability.
In a statement released today, the PCAOB said the board felt the 2025 effective date at the time “struck an appropriate balance between the benefits to investors of having QC 1000 take effect as soon as practicable and the need to allow sufficient time for registered public accounting firms to design and implement robust QC 1000-compliant quality control systems.”
However, the board’s decision to delay the effective date by one year “takes into account information from various sources that some firms have encountered implementation challenges that, as a practical matter, may be insurmountable within the previously established timeframe,” the PCAOB said, adding “the board believes that an additional year is sufficient time for firms that have encountered implementation challenges to overcome those challenges.”
The PCAOB said it hasn’t made or proposed any changes to the text of the new and amended standards, rules, or forms from the text adopted by the board. Additionally, registered accounting firms are still allowed to comply with the requirements of QC 1000 before the effective date—except as to reporting to the PCAOB on the evaluation of the quality control system.
Standards, rules, and forms affected by the change to the effective date include:
New quality control standard QC 1000, A Firm’s System of Quality Control;
New PCAOB Rule 3400, Quality Control Standards;
New PCAOB Rule 2203A, Report on the Evaluation of the Firm’s System of Quality Control, and new PCAOB Form QC;
Amended and retitled AS 2901, Responding to Engagement Deficiencies After Issuance of the Auditor’s Report (formerly Consideration of Omitted Procedures After the Report Date);
New ethics standard EI 1000, Integrity and Objectivity;
New AS 1310, Notification of Termination of the Auditor-Issuer Relationship (recodifying SEC Practice Section (“SECPS”) § 1000.08(m) and applying the requirements to all registered public accounting firms and all issuer engagements); and
Amendments to AS 1215, Audit Documentation; AS 1220, Engagement Quality Review; AS 2101, Audit Planning; AS 2110, Identifying and Assessing Risks of Material Misstatement; AS 2201, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements; AS 2315, Audit Sampling; AS 4105, Reviews of Interim Financial Information; Attestation Standard No. 1, Examination Engagements Regarding Compliance Reports of Brokers and Dealers; Attestation Standard No. 2, Review Engagements Regarding Exemption Reports of Brokers and Dealers; AT Section 101, Attest Engagements; ET Section 101, Independence; ET Section 191, Ethics Rulings on Independence, Integrity, and Objectivity; PCAOB Rule 2204, Signatures; PCAOB Rule 2205, Amendments; PCAOB Rule 2206, Date of Filing; PCAOB Rule 3500T, Interim Ethics and Independence Standards; Form 1, Application for Registration; Form 2, Annual Report Form; and Instructions to Form AP, Auditor Reporting of Certain Audit Participants.
The board’s action delays the effective date of the rescission of (i) PCAOB Rule 3400T, Interim Quality Control Standards; (ii) ET Section 102, Integrity and Objectivity; and (iii) AS 1110, Relationship of Auditing Standards to Quality Control Standards, to Dec. 15, 2026.
Until Rule 3400T is rescinded on Dec. 15, 2026, the following interim quality control standards will remain in effect, according to the PCAOB:
QC Section 20, System of Quality Control for a CPA Firm’s Accounting and Auditing Practice;
QC Section 30, Monitoring a CPA Firm’s Accounting and Auditing Practice;
QC Section 40, The Personnel Management Element of a Firm’s System of Quality Control-Competencies Required by a Practitioner-in-Charge of an Attest Engagement;
SECPS § 1000.08(d), Continuing Professional Education of Audit Firm Personnel;
SECPS § 1000.08(l), Communication by Written Statement to all Professional Personnel of Firm Policies and Procedures on the Recommendation and Approval of Accounting Principles, Present and Potential Client Relationships, and the Types of Services Provided;
SECPS § 1000.08(m), Notification of the Commission of Resignations and Dismissals from Audit Engagements for Commission Registrants;
SECPS § 1000.08(n), Audit Firm Obligations with Respect to the Policies and Procedures of Correspondent Firms and of Other Members of International Firms or International Associations of Firms;
SECPS § 1000.08(o), Policies and Procedures to Comply with Independence Requirements;
SECPS § 1000.38, Appendix D—Revised Definition of an SEC Client;
SECPS § 1000.42, Appendix H—Illustrative Statement of Firm Philosophy;
SECPS § 1000.43, Appendix I—Standard Form of Letter Confirming the Cessation of the Client-Auditor Relationship;
SECPS § 1000.45, Appendix K—SECPS Member Firms With Foreign Associated Firms That Audit SEC Registrants; and
SECPS § 1000.46, Appendix L—Independence Quality Controls.
[CFO Practive Advisor]
