PCAOB Proposes Disclosure of Engagement Partner, Other Firms In Audit
Earlier today, the Public Company Accounting Oversight Board voted to release proposed amendments to its standards to require disclosure of the name of the audit engagement partner, and disclosure of certain other persons and firms associated with the audit. The PCAOB’s press release and related documents are linked at the bottom of this post.
The proposal follows from a recommendation of the U.S. Treasury Advisory Committee on the Auditing Profession published in 2008, and a PCAOB Concept Release issued in 2009, including consideration of comment letters received on that Concept Release, and input received by the PCAOB by its Standing Advisory Group, Investor Advisory Group, and others. For background, particularly regarding the move to require ‘disclosure’ vs. ‘signature’ by the engagement partner, and a discussion about potential liability issues arising from such disclosure or signature, see our earlier blog post.
PCAOB Chief auditor Marty Baumann outlined today’s proposal as requiring disclosure of the:
· Name of the engagement partner [to be disclosed], in the audit report
· Name of the engagement partner, [to be disclosed] in the annual report filed by each registered audit firm with the PCAOB [Form 2]
· Names, locations, and extent of participation of other persons and firms who took part in the audit
The board voted unanimously in favor of releasing for public comment the proposal on disclosure of the engagement partner and certain other firms/persons involved in the audit. The staff recommended, a 90-day comment period, noted Calandriello; ending Jan. 9, 2012.
Read additional highlights from the the Q&A that took place between PCAOB board members and staff as the board prepared to vote on this proposal, detailing some of the key issues involved including potential liability and cost-benefit.