We've discussed before that there are always unforeseen consequences when it comes to Sarbox. Well, no sooner has the PCAOB released AS5--the updated AS2--and already people are foreseeing some big downsides. You do have to wonder if things are really going to improve, procedurally and from a cost perspective. The critics are out in force and make some good points. Some think the new latitude is increasing the risk for auditing firms, which will force them right back into the overly conservative behavior the update was designed to prevent. Does the change from "more than a remote likelihood" to a "reasonable possibility" make a difference pragmatically speaking. This might result in even more strained relationships between management and auditors. You can see the argument: "You're focused on too many issues. Stick to the following," rebutted by, "It's our butt on the line. We'll get back to you." Another issues is technology-driven IT-related controls. As of now, auditors still examine the systems. Critics have argued they do not have the expertise. But the new standard doesn't seem to address this. We'll undoubtedly hear more about this.

For more:
- here's an article [1] from cfo.com
- PCAOB gives top accounting firms poor grades. Article [2]