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Pcaob

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Submitted By sant12
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On December 4, 2013, the PCAOB re-proposed amendments to its standards that would improve the transparency of public company audits. The amendment is made up of two parts which includes disclosing names, locations, and the extent to which other independent accounting firms took part in the audit, as well as disclosing the name of the engagement partner in the auditor's report. Though both issues have definitely caused a stir in the accounting profession, disclosing the name of the engagement partner has sparked many more debates among professionals. While the PCAOB believes that this requirement will be of great help to improve the transparency, there are many others who believe that the disclosure is just “a solution in search of a problem”. (Frenzel, 2014) A benefit that this proposed amendment will bring to the profession is that it has the potential to make auditors more accountable. The audit partner will feel more responsible for the work that is being performed, as his/her name will be attached to the report. In response, this increased feeling of responsibility will encourage better performance on their part, which will cascade down to the entire engagement team. This means that auditors will be more thorough, decreasing the chances of discrepancies, and therefore improving the quality of audits. Additionally, disclosing the name of the engagement partner would provide investors with more information, which would benefit both them and the public. Including the name of the partner in charge would help investors asses the audit quality by using the partner's “track record” of previous engagements. Investors rely on the audit report to make their decisions, and increased transparency will help them make the “right” decision. Overall, this proposed amendment will have the ability to improve the transparency of audit reports by improving the engagement...

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