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PCAOB withdraws proposed rules requiring extensive firm and engagement metrics
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The PCAOB on Tuesday withdrew its request for SEC approval of rules that would have required registered firms to report a significant new set of firm and engagement metrics.
An AICPA statement called the decision “the right one.”
In the statement, Sue Coffey, CPA, CGMA, the AICPA’s CEO–Public Accounting, said the AICPA had expressed concerns that the “proposed requirements would have harmed the U.S. capital markets and the investing public. Among our concerns was the potential unintended consequence of the rules prompting small and midsized audit firms to stop performing public company audits, impacting companies that depend on those audit firms as they seek access to U.S. capital markets. The PCAOB’s decision not to move forward with the rules is the right one.”
The AICPA, in a comment letter dated Dec. 19, 2024, urged the SEC to refrain from approving the rules after previously asking the PCAOB to reconsider the adoption of the rules on numerous occasions.
“We believe the recently adopted PCAOB rules will pose significant challenges for accounting firms,” Coffey wrote in the comment letter.
When the PCAOB approved the rules on Nov. 21, 2024, an AICPA statement warned against the “significant risk” that the new requirements could pose, reiterating its stance from a June 18 comment letter that the rules could “have unintended negative consequences, including driving small and medium-sized firms out of the public company auditing practice.”
Under the final rules, PCAOB-registered firms would have been required to publicly report eight new metrics relating to audits and audit practices, in addition to several new requirements related to firm filings on the PCAOB’s Annual Report Form (Form 2) and its Special Reporting Form (Form 3).
The rules withdrawal will be among the topics covered on the next AICPA Town Hall, scheduled for Thursday at 3 p.m. ET.
— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.
