PCAOB Plans New Approach on Audit Engagement Partner Disclosure and Audit Quality Indicators

The Public Company Accounting Oversight Board has scheduled an open meeting for next Tuesday to consider the issuance of a supplemental request for comment on rules to require disclosure of certain audit participants and a concept release on audit quality indicators.

At the open meeting, the PCAOB will consider issuing a supplemental request for comment on a 2013 proposal to require auditors to disclose in the auditor's report the name of the engagement partner and information about certain other participants in the audit. The board will consider seeking comment on an alternative to disclosure of this information in the auditor's report, whereby the information would be required to be disclosed on a new PCAOB form.

PCAOB chairman James Doty mentioned the new form during a speech Monday in Brussels. “Auditors ought to be fighting for the attention of investors, clamoring to meet investor demand better than the next firm, with star auditors known for their integrity, as other professions do. But many still express concerns about risk,” he said. “I believe there is a middle ground that will provide investors this disclosure in a form that reduces auditors' perception of litigation risk. We have developed such a form, which auditors could file with the PCAOB. At the end of this month I expect to seek comment on such a form and, I hope, bring the U.S. into line with international standards soon.”

The PCAOB will also consider at next week’s meeting issuing for public comment a concept release on the content and possible uses of a group of potential audit quality indicators, quantitative measures that may provide new insights about how to evaluate the quality of audits.

The meeting is open to the public and will take place in the PCAOB’s meeting room at 1666 K Street NW, Washington, D.C. starting at 10:00 AM Eastern Time. A webcast via a link on the PCAOB’s Web site will be made available the day of the meeting. The meeting also will be available via podcast later in the day.