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4110 PCAOB Registration
us SEC - Financial Reporting Manual
4110.1 PCAOB Rule 2100 requires each firm (domestic or foreign) to register with the PCAOB that:
a. prepares or issues any audit report with respect to any issuer; or
b. plays a substantial role in the preparation or furnishing of an audit report with respect to any issuer.
4110.2 A public accounting firm not registered with the PCAOB may be able to perform some audit services for an issuer if the firm does not play a substantial role in the preparation or furnishing of the audit report as defined by PCAOB Rule 1001(p)(ii).
4110.3 In accordance with PCAOB Rule 2107(b)(1), a firm that was once registered and then later withdrew may reissue or give consent to the use of a prior report that it issued while registered. However, the firm cannot update or dual-date a previously issued report after the firm is no longer registered, as that involves additional audit work.
4110.4 Issuer financial statements audited by a nonregistered firm are considered to be "not audited," and any 10-K, proxy statement, or registration statement containing or incorporating by reference such financial statements is deemed substantially deficient. In addition, the 10-K is deemed not timely filed. The 10-K or filing should be amended immediately to remove the nonregistered auditor's report and label the columns of the financial statements as "not audited." The issuer would then need to file another amendment to file financial statements audited by a registered firm.
4110.5 The following chart outlines the application of certain PCAOB requirements in various filings with the SEC. (Last updated: 12/31/2022)
Entities for which an audit report on the financial statements is included in the document filed with SEC
:
| Auditor's report on financial statements in current filing must be issued by a public accounting firm registered with the PCAOB?
| Auditor's report on financial statements must refer to PCAOB standards?
| |
1
| Issuer
and its predecessor
| Yes
| Yes
|
2
| Entity that has filed an initial registration statement
| Yes
| Yes
|
3a
| Operating company (predecessor) whose financial statements are filed by a special purpose acquisition company (“SPAC”)
| Yes
| Yes
|
3b
| Operating company (predecessor) whose pre-acquisition financial statements are filed by an issuer that at the time the reverse merger is consummated is a public "shell company" (See Section 12250.1)
| Yes
| Yes
|
3c
| Operating company (predecessor) whose pre-acquisition financial statements are filed by an issuer that at the time the reverse merger is consummated is not a public "shell company" (See Section 12250.2)
| No, but see Section 12250.2
| No, but see Section 12250.2
|
3d
| Operating company (predecessor) whose post-acquisition audited financial statements are filed by the issuer after consummation of a reverse merger
| Yes
| Yes
|
4
| Non-issuer subsidiary, division, branch, component or investment for which an audit report is filed under S-X 2-05
| See footnote
| Yes
|
5
| Non-issuer entity whose financial statements are filed to satisfy S-X 3-05 or 3-14
| No
| No
|
6
| Non-issuer entity whose financial statements are included in proxy statement or Form S-4/F-4 as target (except for the target of a SPAC in Form S-4/F-4, then follow 3a above)
| No
| No
|
7
| Non-issuer entity whose financial statements are filed to satisfy S-X 3-09
| See footnote
| See footnote
|
8
| Subsidiary- issuer or guarantor of guaranteed debt or debt-like securities whose separate financial statements are filed because it does not qualify for relief under S-X 3-10 (see Section 2500)
| Yes
| Yes
|
9
| Employee benefit plan filing Form 11-K
| Yes
| Yes
|
4110.6 For purposes of Item 5 of the table above, a non-issuer entity could also be a bidder in a Schedule TO or an acquirer in a proxy statement.
4110.7 [Reserved] (Last updated: 12/31/2022)
4110.8 The audited balance sheet of a non-issuer general partner that is included in a transactional filing or registration statement of a limited partnership issuer is not required to be audited by a PCAOB registered firm. The audit report also is not required to refer to PCAOB standards.
1 This table describes the staff’s application of PCAOB registration requirements for an auditor whose report is included in a filing with the SEC. There are instances, not included in the table, when a principal auditor will use the work of another auditor and take responsibility for the other auditor’s work. In these instances, the other auditor’s report is not included in the filing with the SEC. The determination of whether the other auditor must be registered with the PCAOB is made by reference to the Sarbanes-Oxley Act and the PCAOB’s rules. In all such instances the principal auditor is responsible for performing the audit in accordance with PCAOB standards.
2 The term ‘issuer’ means an issuer (as defined in Section 3 of the 1934 Act), the securities of which are registered under Section 12 of that Act, or that is required to file reports under Section 15(d) of that Act, or that files or has filed a registration statement that has not yet become effective under the 1933 Act, and that it has not withdrawn. See Section 2(a)(7) of the Sarbanes Oxley Act and PCAOB Rule 1001.
3 The auditor of the financial statements of the non-issuer entity must be registered if, in performing the audit, the auditor played a “substantial role” in the audit of the issuer, as that term is defined in PCAOB Rule 1001(p)(ii). If the “substantial role” test is not met, the firm is not required to be registered. The inclusion or exclusion of such a report under S-X 2-05 does not affect this determination.
4 S-X 2-02 requires that the auditor’s report state the applicable professional standards under which the audit was conducted. Under S-X 1-02 an audit of the financial statements of an issuer means an examination by an independent accountant in accordance with the standards of the PCAOB. In the situation identified in the chart above, the view of the SEC staff is that the applicable professional standards in S-X 2-02, as applied to the other auditor’s report, relates to an issuer and, therefore, the other auditor’s report must refer to the standards of the PCAOB.
5 If a principal auditor is making reference to another auditor’s report on the financial statements of the non-issuer entity, the other auditor’s report must refer to the standards of the PCAOB. See footnote 4 above. If a principal auditor does not make reference to another auditor’s report on the financial statements of the non-issuer entity, the other auditor’s report need not refer to the standards of the PCAOB.
6 The entity is itself an issuer and so must comply with the rules applicable to issuers.
This is a work of the U.S. Government
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