United States

PCAOB Adopts Rules Requiring Disclosure of the Engagement Partner and Other Accounting Firms Participating in an Audit

Dec 18, 2015
From the Financial Reporting View

On December 15, the PCAOB adopted new rules communicated in PCAOB Release No. 2015-008, Improving the Transparency of Audits: Rules to Require Disclosure of Certain Audit Participants on a New PCAOB Form and Related Amendments to Auditing Standards.

The rules will require auditors to file a new PCAOB Form AP, Auditor Reporting of Certain Audit Participants, for each issuer audit, disclosing:

  • The name of the engagement partner;
  • The name, location, and extent of participation of each other accounting firm that took part in the audit, if its work individually constituted 5% or more of the total audit hours; and
  • The number and aggregate extent of participation of all other accounting firms that took part in the audit whose individual participation was less than 5% of the total audit hours.

The filing deadline for Form AP will be 35 days after the date on which the auditors' report is first included in a document filed with the SEC. In the case of initial public offerings, the Form AP filing deadline will be 10 days after the auditors' report is first included in a document filed with the SEC.

The new rules are subject to approval by the SEC. If approved by the SEC, the disclosure requirement for the engagement partner will be effective for auditors' reports issued on or after January 31, 2017, or three months after the SEC approves the final rules, whichever is later. The requirement to disclose other accounting firms that participated in the audit will be effective for auditors' reports issued on or after June 30, 2017.

The PCAOB staff plans to publish guidance in 2016 about complying with the reporting requirements of Form AP.

Read PCAOB Release No. 2015-008