On November 3, 2026, the Public Company Accounting Oversight Board (“PCAOB”) voted unanimously to propose targeted amendments to AS 6101, Letters for Underwriters and Certain Other Requesting Parties, the standard governing auditor comfort letters. Notably, the proposal would change the rule that permits auditors to provide negative assurance on subsequent changes in financial statement items only as of a date less than 135 days after the end of the most recent period for which the auditor performed an audit or review. The proposal responds directly to the SEC’s May 2026 semiannual reporting proposal, which can be found here and was discussed in our prior blog post, and follows the PCAOB’s June 23, 2026 Request for Public Comment.
Under existing AS 6101, if an issuer seeks to raise capital 135 days or more after the end of the most recent audited or reviewed period, but before its next periodic financial statements are filed, the auditor cannot provide negative assurance in a comfort letter on subsequent changes. This gap would be further exacerbated by the SEC’s proposal to allow companies to elect semiannual instead of quarterly reporting. The period between the end of the semiannual period and the annual report filing deadline could be up to 274 days. The SEC also proposed a small non-accelerated filer subcategory that would have 120 days following fiscal year-end to file its annual reports; for these companies, the period between the end of the third quarter and the annual report deadline would be 212 days.

The proposed targeted amendments to AS 6101 would create a filing-based window, continue to exclude late filers, and add a new note on auditor judgment.
Amended AS 6101.46 would permit negative assurance in a comfort letter as of any date after the end of the most recent audited or reviewed period and before the date by which financial statements for the next annual or interim period are required to be filed. This would eliminate the current gaps in which auditors cannot provide negative assurance and would better align with proposed semiannual reporting.

However, under amended AS 6101.47, late filers would remain excluded. If the next required financial statements were due but not filed, the auditor could not provide negative assurance and would be limited to reporting the procedures performed and findings obtained. Finally, a new note to AS 6101.46 would confirm that negative assurance is permitted but not required, and would list factors that may inform the auditor’s decision. These factors include the length of time since the last audit or review, management’s ability to respond to inquiries through the specified date, changes in senior management or key personnel, the effectiveness of internal control over financial reporting, going concern considerations, restatement activity, and the appointment of a new auditor. The proposal would not change what constitutes negative assurance or expand required auditor procedures.
Despite the link to the SEC’s semiannual reporting proposal, the PCAOB states that it is not necessary to wait for final SEC action, because the amendments would also close existing gaps for quarterly filers.
The PCAOB is seeking comment on all aspects of the proposal, including whether it should be adopted even if the SEC does not adopt semiannual reporting, its economic consequences, its application to emerging growth companies, and the appropriate effective date. Comments are due by January 4, 2027, and any final amendments will require SEC approval before taking effect.
Read PCAOB Release No. 2026-008 here.

