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PCAOB Updates Form AP Guidance for Secondments

Feb 28th 2017
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The Public Company Accounting Oversight Board (PCAOB) updated staff guidance on Feb. 16 to help firms complete new Form AP, particularly in the treatment of staff in secondment arrangements in which employees work temporarily for another firm.

Registered public accounting firms are now required to use Form AP, Auditor Reporting of Certain Audit Participants, to disclose the names of the engagement partner and other accounting firms that participate in an audit.

The updated staff guidance, Auditor Reporting of Certain Audit ParticipantsandRelated Voluntary Audit Report Disclosure Under AS 3101, Reports on Audited Financial Statements,replaces a version the PCAOB issued in late January.

The guidance states that another accounting firm is considered to have participated in the audit if:

  • The principal auditor takes responsibility for the work and report of the other accounting firm as described in AS 1205, Part of the Audit Performed by Other Independent Auditors; or
  • The other accounting firm or any of its principals or professional employees was supervised under AS 1201, Supervision of the Audit Engagement.

But supervision of a professional employee in a secondment arrangement doesn’t mean that the other accounting firm participated in the audit.

For purposes of reporting on Form AP, a secondment arrangement means “an employee of an accounting firm in one country is physically located in another country, in the offices of another accounting firm, for at least three consecutive months, performing audit procedures with respect to entities in that other country (and not performing more than de minimis audit procedures over the term of the secondment in relation to entities in the country of his or her employer),” the guidance states.

In determining audit hours and participation, employees in a secondment arrangement should be treated as if they were employees of the accounting firm where they are “seconded,” the guidance states.

Firms are required to file Form AP for public company audit reports issued on or after Jan. 31 for engagement partner names and June 30 for other accounting firms participating in an audit.

Related articles:

PCAOB Provides More Details on Form AP Reporting
PCAOB Adopts New Rules on Naming Audit Engagement Partner


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