On May 9, 2016, the Securities and Exchange Commission (the “SEC”) issued an order approving the proposal of the Public Company Accounting Oversight Board (the “PCAOB”) to adopt new rules (Rules 3210 and 3211), a new form, and amendments to auditing standards (collectively, the “Proposed Rules”) relating to audit engagement partners and other accounting firms that participate in issuer audits. The PCAOB adopted the Proposed Rules on December 15, 2015 and filed the proposal with the SEC on January 29, 2016. On May 11, 2016, the PCAOB reproposed its auditor reporting standard, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion (the “Re-Proposal”), based on comments received after the PCAOB’s 2013 proposal and its April 2014 public meeting.
Pursuant to the Proposed Rules, a registered public accounting firm, when issuing audit reports for an issuer, must file with the PCAOB a report on Form AP that includes the name of the engagement partner and Partner ID, as well as certain identifying information about the auditing firm and information relating to the level of the firm’s participation in the audit. The specific information required in the Form AP depends on whether or not responsibility for the audit was divided among other accounting firms and whether the accounting firm participated in at least 5% of the total audit hours. The Proposed Rules generally require the accounting firm to file the Form AP within 35 days after the date the auditor’s report is first included in a document filed with the SEC, and within 10 days after the auditor’s report is first included in a registration statement filed with the SEC. Firms will continue to file through the PCAOB’s existing web-based Registration, Annual, and Special Reporting system.
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