US Auditors to Hunt For Law-Breaking Risks Under Draft Rules (1)

The US audit board aims to set a higher standard for how auditors weigh the financial toll of possible crimes and regulatory missteps—the kind that have cost companies and investors billions.

Draft rule changes the Public Company Accounting Oversight Board voted 3-2 to release for public comment on Tuesday would require auditors to consider a wider range of misdeeds that could materially alter the financial statements when they vet corporate earnings and balance sheets.

The proposal is a response to investor demands for rules that shed more light on corporate legal risks that could threaten the value of their shares—offenses ...