FOR IMMEDIATE RELEASE
ICBA Welcomes New Auditing Guidance
New PCAOB Guidance Would Reduce Costs of Audits
Washington, D.C. (May 16, 2005) - The Independent Community Bankers of America (ICBA) commended the Public Company Accounting Oversight Board for issuing additional guidance for auditors on how to implement the PCAOB's Auditing Standard No. 2, "An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements."
"This new guidance is a good step towards reducing unnecessary costs of internal control audits that are required under Section 404 of the Sarbanes-Oxley Act," said Karen Thomas, executive vice president and director of government relations. "An ICBA survey of publicly held community banks shows that the average community bank will spend more than $200,000 and devote more than 2,000 internal staff hours to comply with Section 404."
"This new guidance incorporates a number of recommendations ICBA made to the SEC to reduce these costs such as encouraging auditors to tailor audit plans to the risks facing individual clients, using the work of others in their audits, and engaging in more communication with their clients," Thomas said. "However, ICBA also recommends that application of Auditing Standard No. 2 be tiered to a company's size and complexity so that community banks are not subject to the same type of internal control testing and auditing as large institutions."
The PCAOB issued the guidance in response to questions and concerns raised at the SEC's April 13, 2005, Roundtable on Implementation of Internal Control Reporting Provisions. In a statement submitted to the SEC in connection with the Roundtable, ICBA urged an exemption from the internal control requirements of Section 404 for community banks in light of their close supervision by bank regulators.