The Public Company Accounting Oversight Board will propose rules for annual and special reporting of information and events by accounting firms that are registered with the board.

The Sarbanes-Oxley Act requires every registered public accounting firm to submit an annual report to the board, and the firms may also be required to report specific information more frequently to both the PCAOB and the Securities and Exchange Commission.

The reporting framework proposed by the PCAOB includes two types of reporting obligations:

  • Each registered firm will have to provide basic information once a year about the firm and the firm's issuer-related practice over the most recent 12-month period.
  • The proposal identifies certain events that, if they occur, must be reported by the registered firm within 14 days.

The board also voted to propose rules that, in certain circumstances, would allow a successor firm to succeed to the registration status of a predecessor firm following a merger or other change in the registered firm's legal form.The rules are intended to minimize disruption of a firm's registration and would allow a firm to succeed outright to a predecessor's registration in certain circumstances without any disruption in registration status. In other circumstances, the proposed rules would allow for temporary succession for a transitional period of up to 90 days while the firm seeks registration.
Comments on the proposed rules must be received by July 24. The PCAOB will then determine whether to adopt final rules, which would be submitted to the SEC for approval. The full text of the rules is available on the PCAOB's Web site, www.pcaobus.org.

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