New Audit Reporting Standards Set by PCAOB
The Public Company Accounting Oversight Board (PCAOB) has recently introduced new audit reporting standards aimed at enhancing transparency and ensuring oversight in the accountancy sector to protect investors. These requirements, once approved by the Securities and Exchange Commission (SEC), will apply to public accounting practices registered with PCAOB.
The key changes include public reporting of standardized metrics related to audits and practices by companies servicing accelerated filers or large accelerated filers. These metrics cover a range of areas such as audit hours, personnel experience, industry expertise, partner and manager involvement, personnel retention, restatement history, training hours, and workload at a company level.
Companies serving as lead auditors for these filers will be required to annually report company-level metrics using a new form called firm metrics (FM). On the other hand, engagement-level metrics for audits will be reported through a revised form AP, now known as ‘Audit Participants and Metrics’.
These updates are designed to provide more insights into the audit processes and practices of public accounting firms, enhancing accountability and transparency for the benefit of investors. Stay tuned for further updates as the regulatory approval process continues.
