BoardroomDirect®

BoardroomDirect®
Update on the current board issues: December 2013

Audit committee issues

 

Highlights of the 2013 AICPA National Conference on Current SEC and PCAOB Developments

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The 2013 AICPA National Conference on Current SEC and PCAOB Developments brought together presenters from across the accounting landscape: regulatory and standard-setting bodies, auditors, users, preparers, and industry experts.

The SEC staff provided an update on regulatory and financial reporting matters including areas of frequent comment and consultation trends. They emphasized the need for high quality, concise disclosures, focusing on ways registrants can improve communications throughout their filings. They also stressed the continued importance of internal controls over financial reporting, asking participants to remain vigilant in order to maintain the gains made over the past decade.

Quality and transparency were themes highlighted throughout the Conference, and were broadly applicable to the spectrum of conference participants. Topics on quality included both financial reporting and auditing, while transparency was discussed in the context of regulatory practices, audits, and disclosures. These themes were emphasized by speakers from the Center for Audit Quality, the SEC, and PCAOB, and echoed by others involved in the financial reporting process.

For a full report on the AICPA conference, read PwC’s Dataline, Highlights of the 2013 AICPA National Conference on Current SEC and PCAOB Developments.

 

PCAOB proposes rule requiring disclosure of lead audit partner’s name

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On December 4 the Public Company Accounting Oversight Board (PCAOB) reproposed for public comment amendments to its auditing standards that would require the name of the lead audit partner and certain other participants in the audit to be disclosed in the auditor’s report on the financial statements of public companies, brokers, and dealers.

"Identifying the engagement partner and providing additional information about the other participants in the audit will increase the usefulness of the auditor's report for investors when making their investment decisions, as well as when voting on the ratification of a company's choice of accounting firm as its auditor," said James R. Doty, PCAOB Chairman.

The amendments, which were originally proposed in 2011, would require disclosing in the auditor's report:

  • The name of the engagement partner who led the audit for the most recent period, and
  • The names, locations, and extent of participation (as a percentage of the total audit hours) of other public accounting firms that took part in the audit, and the locations and extent of participation of other persons (whether an individual or a company) not employed by the auditor who performed procedures on the audit.

Generally, audits today only disclose the name of the firm that issued the auditor's report.

Comments on the reproposed amendments are due by February 3, 2014.

[For background on the reproposal, read PwC’s BoardroomDirect November 2013 (Audit committee issues: PCAOB expected to propose rule requiring disclosure of the lead audit partner’s name).]