Please ensure Javascript is enabled for purposes of website accessibility
November 29, 2022

Audit Partners Will Definitely Be Named, We Just Don’t Know Where or How

This from ProPublica:

In a letter dated August 15, Jeff Mahoney, the general counsel for the Council of Institutional Investors, a nonprofit that represents investment organizations with more than $3 trillion in assets under management, wrote, "to express our surprise and disappointment in the report earlier this week in the New York Times that the Public Company Accounting Oversight Board has decided to dramatically weaken" the reforms.

The bodies are coming to a compromise, with final rules slated to come out next month. As part of the compromise, the accounting firms will be required to disclose who the lead audit partner is, but the partner will not be required to sign the audited financial statements, according to a person familiar with the decision. It's not yet decided in what manner the auditing firms will disclose the lead engagement partner's name.

We know exactly to which NYT report ProPublica refers, it's the one we wrote about that compelled us to scratch our collective heads and go huh?

Per that report:

Audit partners will not be required to sign the statements, but can if they want to. I can imagine how many auditors will voluntarily put their heads on the block.

We were like wait, what?! No, that can't be right. We even asked the PCAOB, who told us:

[Chairman Doty] said he anticipates that we will move forward with the transparency project to disclose the name of the engagement partner in September.

Note the language: disclose the name is not the same as require the audit partner to sign. At the end of the day, the name is going to be out there (note, again, the language: I didn't say on there as in on the audit report) and ultimately that's what matters although we're sure someone will find a loophole along the way that relieves them of responsibility. "Oh, these are my audit reports? I totally don't even remember working on that audit, man."

SO, there you have it. Audit partner naming is still most definitely on the table, while audit partner signing is not. Let's call this progress, or, Accountability Lite.

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Comments are closed.

Related articles

PCAOB Hopes Updating Quality Control Rules Will Maybe Prevent Audit Firms From Constantly Breaking Quality Control Rules

From the earliest days of Going Concern until most recently last month, quality control has been a problematic thing for audit firms. For example, the firm that employed the guy who just got the largest fine the PCAOB has ever given to an individual auditor couldn’t get its quality control systems under control: From 2018 […]

The PCAOB Thinks It Deserves a 12.6% Raise

These days everyone wants a raise that is at least as high as the rate of inflation, which is currently 7.75%. The PCAOB does too. At an open meeting held today [Nov. 18], the Public Company Accounting Oversight Board approved its fiscal year 2023 budget and 2022-2026 strategic plan. […] The 2023 budget is guided by the […]