“If it passes, it will allow companies and auditors to worry more about the things that matter when it comes to financial fraud,” says Patrick Taylor, CEO of Oversight, which makes software for analyzing the accuracy and security of financial transactions. Companies will be able to focus their attention on the more common paths to fraud, such as changes to the general ledger and revenue recognition, and not worry about unlikely paths, like backup.”
The chief problem is that the law, which is designed to keep public companies from cooking their own books, is extremely vague in its requirements, particularly with regard to IT. “For example, the current guidelines require the auditor do a walk-through of every transaction path that might result in a change to financial data,” says Davis. “In a large company, you can imagine how many transaction paths there are.”
But the PCAOB’s proposed changes to the audit standards would allow companies to perform a risk assessment of their systems and practices, and then focus their efforts on the most likely paths of financial fraud, instead of trying to close every possible loophole. “Those are going to be changes that somebody makes to the general ledger, which are relatively easy to detect. “That’s the kind of thing that could make the difference between an audit lasting two weeks or lasting two months,” Davis says.
http://www.darkreading.com/document.asp?doc_id=124538&WT.svl=news1_1