PCAOB releases proposals to enhance transparency about firm and engagement metrics and other matters

On April 9, the PCAOB issued for public comment proposals on (1) public reporting of standardized firm and engagement metrics and (2) collecting information from audit firms.

The metrics proposal sets out standardized firm- and engagement-level metrics that PCAOB staff believes will be useful for investors and other stakeholders. The proposed metrics cover (1) partner and manager involvement, (2) workload, (3) audit resources, (4) experience of audit personnel, (5) industry experience of audit personnel, (6) retention and tenure, (7) audit hours and risk areas (engagement-level only), (8) allocation of audit hours, (9) quality performance ratings and compensation (firm-level only), (10) audit firms’ internal monitoring, and (11) restatement history (firm-level only).

The second proposal would require a combination of public reporting and reporting only to the PCAOB on the firm’s financial information, audit firm governance information, network information, and cybersecurity as well as special reporting.

Comments on both proposals are due by June 7, 2024.
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