On July 7, New York State Governor Andrew M. Cuomo signed into law a bill that allows marijuana to be used for medicinal purposes by patients with serious health conditions. The legislation creates new opportunities but, at the same time, new risks for businesses connected to the industry. Colorado State Auditor Dianne E. Ray a CPA, knows this all too well—last year, she completed the first ever performance audit of her state’s medical marijuana regulatory structure and got a close-up look at this burgeoning sector. 

What happens when the Public Company Accounting Oversight Board (PCAOB) decides to look a bit closer at an audit firm’s activities? According to C. Ian Anderson, the PCAOB’s New York Regional Associate Director of Enforcement and Investigations, firms can expect a multilayered process, with a focus squarely on “whether the auditor acted diligently and with a reasonable degree of competence.” 

In a comment letter published on March 11, the NYSSCPA urged New York City’s Department of Housing Preservation and Development (HPD) to modify a form for its J-51 real estate program that is currently out of sync with generally accepted accounting principles (GAAP) and generally accepted auditing standards (GAAS)—leaving CPAs who are asked to certify the paperwork in an awkward position.   

Though the Public Company Accounting Oversight Board (PCAOB) believes that a proposal for major revisions to the standard audit report it released last August will provide investors with better, more actionable information, critics of the plan are expressing concern that the changes will significantly expand legal costs, by creating more areas of attack for potential plaintiffs. 

During a Feb. 5 budget meeting with the Securities and Exchange Commission (SEC), the Public Company Accounting Oversight Board (PCAOB) said that it was abandoning its efforts to mandate that public companies rotate audit firms every few years.