By Jason Bramwell, Staff Writer
The Public Company Accounting Oversight Board (PCAOB) will reexamine for public comment a proposal that would require the names of the engagement partner and certain other participants in an audit to be disclosed in the auditor's report.
The issue will be discussed during an open meeting the PCAOB has scheduled for 9:30 a.m. ET December 4.
The board will also consider adopting proposed amendments that conform PCAOB rules and forms to the Dodd-Frank Act requirements, particularly those establishing PCAOB oversight over audits of brokers and dealers, as well as amendments to certain rules based on the PCAOB's administrative experience. The conforming amendments were proposed in February 2012.
In October 2011, the PCAOB initially issued for public comment a proposal that would improve the transparency of audits. The proposal directed registered public accounting firms to disclose the name of the audit engagement partner in the auditor's report and on the PCAOB Annual Report form. However, the proposal did not require the audit engagement partner to sign his or her name to the auditor's report.
The PCAOB previously stated that the audit transparency proposal would make the engagement partner's name readily available to the users of the auditor's report while mitigating concerns about minimizing the firm's role in the audit.
The 2011 proposal also required other accounting firms and people not employed by the auditor but who participated in the audit to be revealed in the auditor's report. This disclosure would enable investors to evaluate the other participants in the audit in the same manner that they evaluate the auditor. Investors would also be able to verify whether a disclosed firm or person has had a disciplinary history with the PCAOB or other regulators.
The initial comment period for the proposal ended on January 9, 2012, and PCAOB staff has analyzed the comments and has drafted revisions for the board's consideration, according to the PCAOB.
The 2011 proposal followed a concept release issued by the PCAOB in July 2009 on requiring the engagement partner to sign the audit report.
Making the auditor's report more relevant to investors was the basis of a proposal the PCAOB issued this past August for a new auditing standard and related amendments to enhance the auditor's reporting model.
The new auditing standard – The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion – would retain the pass/fail model in the existing auditor's report, but would provide additional information to investors and other users of financial statements about the audit and the auditor.
The meeting on December 4 is open to the public and will take place in the board's meeting room at 1666 K Street NW in Washington, DC. A webcast via a link on the PCAOB website will be made available the day of the meeting. The meeting also will be available via podcast later in the day.