PCAOB Rule to Improve Audit Transparency Approved by the SEC

Audit|Public Companies

By Kurt Herdman

On May 10, 2016, the Securities and Exchange Commission (SEC) approved the Public Company Accounting Oversight Board (PCAOB) rules that are aimed to improve the transparency of public company audits.  PCAOB Release No. 2015-008 was issued this past December, and requires certain disclosures on the new PCAOB Form AP, Auditor Reporting of Certain Audit Participants (Form AP). 

PCAOB firms will be required to file Form AP for each issuer audit, and will be required to disclose the name of the engagement partner, the name, location and extent of participation of each other accounting firm participating in the audit whose work constituted at least 5% of total audit hours, and the number and aggregate extent of participation of all other accounting firms participating in the audit whose individual participation was less than 5% of total audit hours.  The information filed in Form AP will be available to the public in a searchable database on the PCAOB’s website.

Audit firms will be required to file the PCAOB Form AP for all public company audits issued on or after January 31, 2017, and information about other firms participating in the audit must be filed for all public company audits issued on or after June 30, 2017.  Ultimately, the goal of the new form is to address concerns in the investor community about the transparency of audits, and to provide additional information to the investor community to make informed decisions.  

Contact us with questions about the PCAOB Form AP and read about the services that Schneider Downs offers public companies.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2019 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.