A PCAOB audit asks more of your company than a private-company audit: more documentation, stricter independence checks, and a harder look at internal controls. For calendar-year filers, Q4 is when next year’s audit gets planned and auditor decisions get made. Here is what the standards require, what inspections mean for you, and a timeline that spreads the preparation out.

What is a PCAOB audit, and how is it different from a private-company audit?

The Public Company Accounting Oversight Board was created by the Sarbanes-Oxley Act of 2002 to oversee the audits of public companies. Any firm that audits a company whose securities trade on U.S. markets must be registered with the PCAOB, and the engagement follows PCAOB auditing standards rather than the AICPA standards that govern a private-company audit.

The PCAOB audit vs AICPA audit difference shows up in three places. Independence rules are tighter, so the services you can buy from your audit firm are limited and the audit committee must approve them in advance. Documentation runs deeper, because anything not documented is treated as not done. And internal control over financial reporting, or ICFR, draws far more of the auditor’s time.

What does a PCAOB inspection involve, and why should you care?

The PCAOB inspects registered firms on a set cycle: every year for firms that audit more than 100 public companies, and at least once every three years for smaller firms. Inspectors review the auditor’s work on selected engagements; your financial statements are not re-audited.

You should still care, because inspection findings change auditor behavior. A firm whose documentation or ICFR testing drew comments will ask its clients for more evidence, earlier, the next year. A small public company that reads the current inspection focus areas can see those requests coming. The inspection is of your auditor, but the preparation is yours.

How do you prepare for a PCAOB audit? Start two quarters out

PCAOB audit requirements reward companies that spread the work across the year. A workable timeline for a small reporting company looks like this:

• Two quarters out: confirm the close calendar, refresh ICFR documentation for any process that changed this year, and assign an owner to every item on last year’s request list.
• One quarter out: review every service purchased from your audit firm against the audit committee’s pre-approvals, and let interim control testing start on schedule.
• Audit season: have reconciliations, support for estimates, and variance explanations ready before fieldwork begins, and route all auditor requests through one point of contact.

Most smaller reporting companies are exempt from the auditor’s attestation under Sarbanes-Oxley Section 404(b), but management’s own ICFR assessment under Section 404(a) still applies, so the documentation work stays on your list.

How RRBB’s New Jersey advisors help with PCAOB audits

RRBB is registered with the PCAOB and is a member of the Center for Audit Quality. Our RRBB advisors have served public companies across 60+ years of practice from offices in Somerset and Union, New Jersey, working with clients in New Jersey, New York and Maryland. The firm’s SEC and public company services team performs financial statement audits and interim reviews under PCAOB standards, along with Sarbanes-Oxley Section 404 compliance work, backed by RRBB’s broader audit and assurance services. As an independent member of PrimeGlobal, RRBB brings the expertise of a large firm while still serving clients with personal attention. Our guide to audits, reviews and compilations explains where a PCAOB audit sits on that ladder.

How do I prepare for a PCAOB audit as a small public company?

Start two quarters before fieldwork: confirm the close calendar, refresh internal control documentation, assign an owner to every expected request, and clear independence and pre-approval checks with the audit committee before interim testing begins.

What is a PCAOB audit and how is it different from a private-company audit?

It is the audit of a public company, performed by a PCAOB-registered firm under PCAOB auditing standards. Compared with a private-company audit under AICPA standards, it carries stricter independence rules, deeper documentation requirements, and more work on internal control over financial reporting.

What does a PCAOB inspection involve?

Inspectors review a registered audit firm’s work on selected engagements, every year for firms auditing more than 100 public companies and at least every three years for smaller firms. Your company is not the one inspected, but the findings shape what your auditor asks of you next season.

What should a small public company look for in an audit firm?

Confirm PCAOB registration, read the firm’s latest inspection report on the PCAOB website, and ask who will staff the engagement day to day, how the firm approaches ICFR work for smaller reporting companies, and whether partners are reachable at your reporting deadlines.

Audit planning for next fiscal year is being decided now. Contact our RRBB advisors at (908) 231-1000 or through rrbb.com/contact to talk through your situation.