Seven’s a Charm for Investors: PCAOB Disclosure of Engagement Partner Finally Reality
What comes to mind when you think of the Number 7 — lucky, seven seas, seven wonders of the world, Mickey Mantle, seven swans a-swimming?
How about adding to the list the number of years it took for the Public Company Accounting Oversight Board (PCAOB) to require disclosure of the engagement partner. That’s right, it has been almost seven years since 28 July 2009 when the first concept release was published to when the rules were finally approved on 10 May 2016. There have been many ups and downs along the way leading to a final rule, but thankfully, investors and other interested users will now be able to see the individual responsible for the independent audit. This information will no longer be obscured behind only the firm name. CFA Institute has consistently advocated for disclosure of the engagement partner as a means to enhance audit quality.
The following are the main changes coming in 2017:
- The names of audit engagement partners will be disclosed and information about other firms that participate in the audits will be filed on a new PCAOB Form AP.
- The information filed on the form will be available through a searchable database, and users will be able to search by engagement partner name, by public company or issuer name, and by audit firm to find the engagement partner assigned to an audit.
- Database users also will be able to search for the name, location, and extent of participation of other audit firms that participated in the audit.
By the way, the UCLA Bruins basketball team holds the record for seven straight national championships. In the same time span, the PCAOB, to their credit, slogged through a minefield of resistance to finally celebrate its (and investors’) win.
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