The US Public Company Accounting Oversight Board (PCAOB) has issued updated staff guidance for Form AP, Auditor Reporting of Certain Audit Participants, to be used by firms to disclose the names of engagement partners and other firms participating in public company audits. The update, Staff Guidance on Form AP, Auditor Reporting of Certain Audit Participants and Related Voluntary Audit Report Disclosure Under AS 3101, Reports on Audited Financial Statements, replaces the prior update issued in January 2017.
In December 2015, the PCAOB adopted new rules and accompanying amendments to auditing standards requiring firms to disclose the names of each audit engagement partner as well as the names of other audit firms that participated in each audit. Pursuant to these new rules, affected firms are required to begin filing Form AP in 2017.
Firms are required to file Form AP for public company audit reports issued on or after:
- 31 January 2017, for engagement partner names
- 30 June 2017, for other audit firms that participated in the audit.
The updates to Form AP are primarily technical clarifications, with the most significant change being the addition of an explanation of the filing deadline for issuers that do not file reports with the Securities and Exchange Commission (SEC). Like the previous version, the staff guidance covers provisions of the new rules, including:
- General requirements
- Assigning engagement partner identification numbers
- Dual-dated audit reports
- Other accounting firm disclosure rules
- Exclusions from disclosure
- Estimating audit hours when disclosing the participation of other accounting firms.
The February update provides guidance to firms on the treatment of professional staff in secondment arrangements. Form AP requires firms to report information if one or more ‘other accounting firms’ participated in the audit. The February update notes that “supervision of a professional employee in a secondment arrangement does not, in and of itself, mean that the other accounting firm participated in the audit”.
For this purpose, a ‘secondment arrangement’ is “one in which a professional employee of an accounting firm in one country is physically located in another country, in the offices of another accounting firm, for at least three consecutive months, performing audit procedures with respect to entities in that other country (and not performing more than de minimis audit procedures over the term of the secondment in relation to entities in the country of his or her employer)”. In this case, the firm in the employee’s own country would not be deemed to have participated in the audit in the country in which the employee is physically located at the time of the audit.
The updated staff guidance is available on this link.
The PCAOB also provides a Form AP resource web page, available on this link.
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