The PCAOB plans to repropose amendments to its auditing standards related to improving the transparency of audits. The proposal would require a firm to disclose the name of the engagement partner and the names, locations, and the extent of participation of other audit participants. While prior versions of the proposal in 2011 and 2013 would have required the name of the engagement partner to appear in a registrant’s filing, the new proposal is expected to require submission of the names after the fact.
The audit regulator’s updated standard-setting agenda shows that the PCAOB will have a new request for comment. PCAOB Chairman James Doty said they will solicit public comment on allowing audit firms to provide the name of the engagement partner in a newly created form filed with the PCAOB, instead of in a registrant’s Annual Report on Form 10-K.
Doty said he expects the PCAOB to issue the new request for comment within the next month.
Cindy Fornelli, executive director of the Center for Audit Quality, said she was “encouraged” by the proposal. “While we broadly support enhancing transparency into the audit, the CAQ maintains that the auditor's report is not the most sensible place to include this information, given legal consent issues that could arise,” Fornelli said in a statement.
On October 8 the FASB added a project to its agenda to simplify and improve the accounting for share-based payments. It is expected that the FASB will deliberate the improvements project and then issue an exposure draft.
The FASB’s tentative decisions at the meeting will likely affect all companies that issue share-based compensation. The decisions are intended to simplify those areas of accounting that are currently viewed as complex. However, these changes could have significant impact on a company’s financial statements. [To learn more about the impact, read PwC’s Insights from Human Resource Services: FASB likely to make changes to share-based payment accounting and PwC Partner Ken Stoler’s comments in an October 21 Society for Human Resource Management article.]
The project is designed to improve the accounting for share-based payments to employees in the following areas:
Other areas of improvement the Board directed its staff to further research are: