The PCAOB is looking to force auditors to consider whether a company is complying with all laws and regulations that apply to it.

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The PCAOB is looking to force auditors to consider whether a company is complying with all laws and regulations that apply to it. The result of which could mean that correspondence between companies and their Attorneys is subject to audit oversight. Challenging the role of lawyers in providing companies with confidential advice under attorney client privilege.

“Companies’ non-compliance with laws and regulations, including fraud, can really have devastating consequences for investors,” she said. “This proposal is simply making sure that the protection investors think they’re getting today matches what the standard requires.” – the chair of the PCAOB.

If it were to be implemented it could have an effect on the relationship between attorneys and the clients, and the role that attorneys play in advising organizations. They will be less likely to go into print with advice or guidance, for fear it is used as evidence, and organizations maybe less likely to see written advice from Attorneys. With the recent release of the SEC final cyber ruling on incident discloser and material risks, the role of external counsel could be under threat. As the advice and guidance from Attorneys could be made available to audit oversight. Allowing auditors closer scrutiny of cyber incidents and breaches in regulatory compliance.

Ted Dziekanowski Rachel V. Rose, JD, MBA Stephen Pitt-Walker, JD, FGIA Bob Dix

#cybersecurity #cyberriskmanagement #audit #regulation

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