The name of the engagement partner in an audit of a public company will be disclosed on new Form AP, Auditor Reporting of Certain Audit Participants, as a result of a new rule approved by the PCAOB.
Form AP also will require disclosure of the other firms that participate in public company audits, as well as their percentage of participation. SEC approval is required for the rule to take effect.
Filing of Form AP with the PCAOB will be required no more than 35 days after the audit firm files the audit report with the SEC. The form will be available to be reviewed by the public on the PCAOB's website.
For initial public offerings, Form AP will be required to be filed no later than 10 days after the auditor's report is first included in a document filed with the SEC.
The new rules also will permit audit firms to voluntarily disclose in the audit report the names of engagement partners and other firms participating in the audit.
To prevent confusion when engagement partners have names that are the same or change their names, firms will be required to assign engagement partners unique identification numbers for disclosure on Form AP. When partners change firms, they will be assigned a new partner ID, but their previous ID number also will be reported on any new Form AP associated with that partner.
The disclosure of other audit participants is designed so that for firms whose participation was at least 5% of total audit hours, disclosure of the name, location, and percentage of participation will be required on Form AP. For firms whose participation is less than 5%, only the number of firms and their aggregate percentage of participation will be required to be disclosed.
Upon SEC approval, the new rules for engagement partner disclosure will apply to auditors' reports issued on or after Jan. 31, 2017, or three months after SEC approval of the final rules, whichever is later. For disclosure of other accounting firms, the rules will apply to auditors' reports issued on or after June 30, 2017.