The Impact Of Pcaob's New Audit Standard On Regulators, Financial Reports Users, And Auditors

2096 WordsMar 26, 20169 Pages
On December 15, 2015, the Public Company Accounting Oversight Board (PCAOB) posted new final regulations that require auditors of public companies to disclose the identity of the engagement partner on each audit, as well as information on other accounting firms that participated in each audit (PCAOB 2015). Although the new Audit Standards seem to be perfectly reasonable and relatively low in cost, they obviously will impose a certain workload on accounting firms, which will translate into certain additional costs. So who pays for this? Not the PCAOB, of course, but the accounting firms, who will no doubt pass these costs on to their clients. In this paper, I will analyze the impact of PCAOB’s new audit standard on regulators, financial…show more content…
In Taiwan, every audit report requires the disclosure of both the audit firm and the audit engagement partner’s name (Huang, 2009). The fact that many large economy countries like Taiwan follows the standard shows that this rule is effective in enhance audit quality as well as the public trust in audit at a certain degree. An audit partner plays a very important role in the quality of the audit. They primarily responsible for the final audit quality even though audit quality is the result of the whole audit team. Therefore, having audit engagement partner’s name disclosed will hold an audit partner more responsible for the audit report. The partners will have to make sure their audit team really perform effective audit work, which results in a higher audit quality. Moreover, financial report users will feel more comfortable to reliance on the audit report when they know in confidence the person who holds accountability for the audit report is. The ultimate purpose of the PCAOB is to improve the quality of financial reporting and its benefits to users. For the same reason, making the U.S auditing standards compatible with its global counterparts would improve audit quality and usefulness, especially since many U.S companies practice internationally. In addition, having the information about engagement partner’s names and about other accounting companies who are working on the engagement would help regulators and investors in locating
Open Document