Attention all SEC audit firms, this a public service announcement.
The folks down at the Public Company Accounting Oversight Board are not-so-subtly reminding firms with publicly traded audit clients to, well, register with them so you can, well, continue in business.
According to the PCAOB, too many firms have been gingerly going through the registration process, which, in order to be in compliance with Sarbanes-Oxley, must be completed by Oct. 22.
Under Sarbanes-Oxley, the board has 45 days to review registration applications.
Not a whole lot of time by anyone’s yardstick.
And if that’s not pressing enough, public firms that want to register must complete and submit Form 1 by the first week in September. In the news business we call that banging against deadline.
By the way, Form 1 is available
And for those who need a cattle-prod reminder, Sarbanes-Oxley and the board mandate registration of all public accounting firms that issue or prepare audit reports on U.S. public companies, or that play a substantial role in the preparation of such audit reports.
As a reminder, accounting firms that have registered with the PCAOB won't necessarily be allowed to withdraw that registration in the future — even if they decide to terminate their public audit practices.
Under a PCAOB rule proposed last month, firms under investigation, as well as those facing disciplinary proceedings, will not be granted the leeway to suddenly withdraw from registration.
As someone whose livelihood depends on covering the profession, I’d hate to see a good portion of the accounting community get more than a slap on the wrist or after-school detention for a basic thing such as not registering or signing up late. As if we accounting scribes don’t have enough to write about anyway.
And yes, increased accounting oversight is going to cost your clients — particularly your bigger ones.
Last month the board began sending its invoices to fund its operation — correspondence that I’m sure was met with as much enthusiasm from its recipients as a collection notice. And, like most bills, it must be paid within 30 days.
About 5,200 publicly traded companies and about 3,300 investment companies will receive invoices for PCAOB accounting “support fees.” Roughly 62 percent of issuers will pay $1,000 or less in support fees to the board, but the largest 1,000 issuers will shoulder an imposing 87 percent of the total fees due.
According to the nation’s top “accounting cop” William McDonough,
"The bulk of our accounting support fees are assessed against the largest equity issuers. Small companies need not be concerned about increased costs while they and their shareholders benefit from the PCAOB's attention to the quality of audits."
While that may be true, all the added oversight will be rendered moot if SEC firms slip and fall in the registration process.
