PCAOB Issues Proposals on Related Parties, Significant Unusual Transactions and Financial Relationships with Executive Officers

Last week, the Public Company Accounting Oversight Board proposed for comment a new auditing standard concerning related parties and amendments to existing standards addressing a company’s significant unusual transactions and financial relationships with executive officers. While they are directed at auditors, the proposals contemplate procedures that should be instructive when management evaluates the continuing effectiveness of the design and operation of the company’s disclosure controls and procedures. We summarize the most important of these in the attached alert memo.