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Journal entry — New PCAOB rules require disclosure of engagement partner and other audit participants

Published on: Dec 16, 2015

Yesterday, the PCAOB issued new rules and related amendments1 that, subject to approval by the SEC, require audit firms to file a new form, Form AP, that discloses:

  • The name of the engagement partner;
  • The name, location, and extent of participation [as a number or within a range] of each accounting firm participating in the audit whose work constituted at least 5% of total audit hours; and
  • The number and aggregate extent of participation of all other accounting firms participating in the audit whose individual participation was less than 5% of total audit hours.

The form must be filed with the PCAOB within 35 days (10 days for initial public offerings) after the date the audit report is first included in the SEC filing.

As a result of the new rules, PCAOB Auditing Standards 3101 and 1205 (currently AU Sections 508 and 543)2 will be revised to permit voluntary disclosure in the auditor’s report of the engagement partner, participating firms, or both.

Form AP will be available to the public on the PCAOB’s Web site. The new rules will also apply to auditors of emerging growth companies but not to auditors of nonissuer broker-dealers.

The PCAOB determined that since the information auditors need to satisfy the requirement to disclose the name of the engagement partner should be readily available, that requirement will become effective for audit reports issued on or after January 31, 2017, or three months after the SEC’s approval, whichever is later. The effective date of the remaining required disclosures will be for auditors’ reports issued on or after June 30, 2017.

For more information see the PCAOB’s press release and fact sheet.


1 PCAOB Release No. 2015-008, Improving the Transparency of Audits: Rules to Require Disclosure of Certain Audit Participants on a New PCAOB Form and Related Amendments to Auditing Standards.

2 PCAOB Auditing Standard 3101, Reports on Audited Financial Statements, and PCAOB Auditing Standard 1205, Part of the Audit Performed by Other Independent Auditors.

New PCAOB rules require disclosure of engagement partner and other audit participants Image

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