The Public Company Accounting Oversight Board is pushing new disclosure rules for CPA firms, which could ultimately force auditors to alert regulators when they—or their clients—encounter numerous types of governance woes.
Under new rules proposed last week, the PCAOB wants to be notified within 14 days if an audit firm withdraws a public company’s audit report and the company fails to report it to the Securities and Exchange Commission, or if a key member of an audit firm is charged with a crime or becomes involved with a government-initiated civil action. The Board also wants to be notified if a firm files for bankruptcy, decides to buy consulting services from parties with a “disciplinary history,” or has any change in its license status with state regulators.
