The Public Company Accounting Oversight Board released a staff guidance document Tuesday to help auditing firms deal with new requirements for disclosing the names of engagement partners and outside firms that participated in an audit.
The guidance relates to filling out Form AP, a new form that audit firms are now required to file to comply with rules that the PCAOB finalized last December and the Securities and Exchange Commission approved last month (see SEC Approves PCAOB Rules on Disclosing Engagement Partner Names). Audit firms are now required to use the form to disclose the names of engagement partners for all public company audits issued on or after Jan. 31, 2017, along with information about other audit firms that participated in audits issued on or after June 30, 2017.
“Form AP will provide transparency to investors about the engagement partner and other accounting firms that took part in the audit,” said PCAOB chief auditor and director of professional standards Martin F. Baumann in a statement. “The guidance issued today will help firms implement the processes required to deliver that information.”
The guidance document details provisions of the new rules, including assigning identification numbers to the engagement partners and estimating the number of audit hours when disclosing the participation of other accounting firms, among other matters.
The PCAOB has also created a new web page on Form AP with information for investors and auditors on the new requirements. The web page includes general instructions for completing the form and a sample form that can be downloaded for reference.
Audit firms can submit a single form by filling out a web form online, or they can submit multiple forms at the same time by using XML. For firms that decide to submit their forms via XML, the web page includes the technical instructions and related XML schema.
The PCAOB staff plans to host conference calls later this year to give firms the opportunity to learn more about using the technology and ask questions. Firms will also get a chance to do test runs submitting Form AP through the web form and XML. More information about the conference calls and testing will be available soon.
Early next year, investors and others will be able to search a Form AP database by engagement partner name, audit firm or public company name through the PCAOB website. Eventually, they will be able to use the database to look up various pieces of data about the engagement partner, including industry experience and number of years as engagement partner of a specific company.
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