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PCAOB proposed amendments to AS 6101: auditor comfort letters and negative assurance
PCAOB proposes to drop the 135-day negative assurance block in AS 6101 and tie the window to SEC filing deadlines instead.
The PCAOB voted at its Nov. 3, 2026 open meeting to issue proposed targeted amendments to AS 6101, Letters for Underwriters and Certain Other Requesting Parties - a standard that, per CPA Practice Advisor, has not been substantially amended since its adoption as an interim standard in 2003. The core change: remove the 135-day convention that currently prevents auditors from providing negative assurance on subsequent changes in specified financial statement items once more than 135 days have passed since the most recent audit or review.
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If adopted, the proposal would replace the 135-day cutoff with a window running from the end of the most recent audited or reviewed period to the filing deadline for the issuer's next required annual or interim financial statements, per CPA Practice Advisor. That means the available comfort window would expand or contract based on the issuer's actual SEC filing obligations rather than a fixed day count. The comment period closes Jan. 4, 2027.
CPA Practice Advisor notes that under the current rule, an auditor who believes negative assurance is appropriate can still be blocked from providing it solely because of where the calendar falls - even when the company is current on all required filings. The proposed change preserves auditor professional judgment; the decision to provide negative assurance remains entirely the auditor's call. A new note in the amended standard would list risk factors the auditor may weigh, though those factors are not stated as restrictions on the auditor's discretion.
The proposal is partly connected to the SEC's pending semiannual reporting proposal. Per CPA Practice Advisor, the existing 135-day convention assumes a quarterly filing cadence; if the SEC moved to semiannual reporting, the current AS 6101 framework would leave longer gaps during which auditors could not provide negative assurance. CPA Practice Advisor reports that PCAOB chairman Demetrios Logothetis said the targeted changes ensure the 'outdated timing convention does not stand in the way of auditors providing negative assurance when they believe it is appropriate.'
No final effective date has been set. The proposal is out for public comment through Jan. 4, 2027, after which the PCAOB would need to adopt final amendments and submit them to the SEC for approval before they take effect. The scope and form of any final rule may change based on comment letters received.
WHAT TO DO IN THE CLOSE
| Review any capital markets transactions scheduled for 2027 where comfort letters will be required and flag the pending rule change. | |
| Track the Jan. 4, 2027 comment deadline; submit feedback if your engagements are affected by the 135-day cutoff. | |
| Brief your capital markets audit teams on the proposed filing-deadline framework so they understand what could change in practice. | |
| Monitor SEC action on the semiannual reporting proposal, which is linked to the AS 6101 timing issue. | |
| Watch for PCAOB board action after the comment period before updating comfort letter engagement templates. |
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QUESTIONS THIS ANSWERS
What is the 135-day rule in PCAOB AS 6101?
Under current AS 6101, an auditor cannot provide negative assurance on subsequent changes in selected financial statement items if more than 135 days have passed since the end of the most recently audited or reviewed period, even if the company is current on all SEC filings.
What would replace the 135-day rule under the PCAOB proposal?
Per CPA Practice Advisor, the proposal would allow an auditor to provide negative assurance from the end of the most recent audit or review period up to the filing deadline for the issuer's next required annual or interim financial statements.
When is the comment deadline for the AS 6101 proposal?
Per CPA Practice Advisor, the comment deadline is Jan. 4, 2027. Comments can be emailed to [email protected] referencing PCAOB No. 2026-008.
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Previously: FASB proposed ASU: indexation guidance for contracts in entity's own equity (ASC 815-40)
A living page: it is re-read and updated as coverage arrives; last updated Wednesday November 4. Facts come from the linked sources; confirm against the issuer's own text before relying on it.
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