PCAOB reporting rules to take effect October 12

Public Company Accounting Oversight Board rules requiring reporting by registered public accounting firms were approved by the Securities and Exchange Commission on August 13, 2009 and will take effect on October 12, 2009. The rules implement a provision of the Sarbanes-Oxley Act of 2002 and constitute the first reporting obligations imposed on registered firms by the Board.

Under the new rules, certain events that occur on or after the October 12 effective date must be reported by a registered firm in a special report on PCAOB Form 3 within 30 days after the event. If certain events occurred between the time of a firm’s registration application and the October 12 effective date, a firm must report those events in a special report on Form 3 within 30 days after the October 12 effective date. Accordingly, the earliest potential deadline for any firm’s filing of a special report on Form 3 is November 11, 2009. Form 3 reportable events range from administrative matters such as changes in a firm's contact information to more substantive matters, including, for example, the institution of certain types of legal proceedings against a firm or its personnel.

In addition, the new rules require registered firms to file annual reports on Form 2, with the first annual reports being due June 30, 2010. Going forward, all firms that are registered with the Board as of March 31 of a particular year must, by June 30 of that year, file an annual report covering the 12-month period ending March 31. Information to be reported annually includes, among other things, information about audit reports issued, disciplinary histories of new personnel, and certain information about fees billed to issuer audit clients for various categories of services.

Under the new rules, all firms registered as of March 31 of a given year must pay an annual fee by July 31 of that year. The Board will announce the amount of the annual fee at a later date.

Finally, the new rules also govern the filing of an optional form, Form 4, which allows, in certain circumstances, for a firm to succeed to the registration status of a predecessor firm without a break in that registration status and without the need to file a new registration application on Form 1. Firms seeking to avail themselves of that option with respect to succession events that occurred before October 12, 2009 would need to file Form 4 with respect to those events by October 26, 2009.

The Board will make each firm’s filings on Forms 2, 3, and 4 available to the public on the Board’s Web site promptly upon the filing of the form. Certain limited information reported to the Board on those forms will not be made public, however, if it meets specified criteria for confidential treatment.

"Adoption of these rules will put into effect an important provision of the Sarbanes-Oxley Act and increase transparency regarding firms registered with the PCAOB, including auditors of public companies and broker-dealers," said PCAOB Acting Chairman Daniel L. Goelzer.

Detailed information concerning the new rules and the forms can be found in the Board’s adopting releases below. Like the Form 1 registration application, Forms 2, 3, and 4 must be filed electronically through the Board’s Web-based system. Closer to the effective date, the Board will publish guidance for registered firms concerning compliance with the reporting requirements and use of the Web-based system for filing Forms 2, 3, and 4.

Periodic Reporting by Registered Public Accounting Firms

Succeeding to the Registration Status of a Predecessor

You may like these other stories...

Clawback policies vary by company, industry: PwCAccording to a report issued to clients by PwC on April 17, companies have instituted a wide range of so-called clawback policies – with no two exactly alike – in...
IRS audits less than 1 percent of big partnershipsAccording to an April 17 report from the Government Accountability Office (GAO), the IRS audits fewer than 1 percent of large business partnerships, Stephen Ohlemacher of the...
Is it time to consider a value added tax?Forbes contributor Joseph Thorndike wrote yesterday that he believes the tax reform proposal by House Ways and Means Committee Chairman Dave Camp (R-MI) was dead on arrival. But he...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.