June 22, 2010

PCAOB Staff Issues FAQs for Audit Firm Annual Reports (Which Are Due Soon)

Last Friday, the PCAOB issued “Staff Questions and Answers” concerning a registered firm’s obligation to file its annual report on Form 2. This guidance comes out pretty late given that all registered firms (those registered as of March 31st) are required to file their first annual reports by June 30th. These annual reports will include information about audit reports issued, disciplinary histories of new personnel, and certain information about fees billed to issuer audit clients for various categories of services.

How to Search the New Annual Reports Filed by Audit Firms: What Are Firms Saying About Their Clients?

The PCAOB will make each firm’s annual report on Form 2 available to the public on this firm filing page promptly upon filing (this also applies to registration forms filed on Form 1 and special reports filed on Form 3).

The search tool that the PCAOB has built is interesting. There are a number of different ways to search the filing database – but each search field has a specific purpose. For example, there is a search field that allows you to search “Annual Reports indicating that the firm played a substantial role in the audit of a specific issuer.” Companies should be curious about what their independent auditors are disclosing about them and regularly check their auditor’s filings each year.

Note that there is no way to conduct an open-ended search as far as I can tell (so the functionality is quite different than the SEC’s EDGAR). Maybe this functionality will be built into future generations of the search tool. Anyways, I will be curious to see how well the PCAOB’s search functionality works once the Form 2s come rolling in – and I’ll let you know what I find…

SIFMA Issues Recommendations on Reforming the Shareholder Communications System

Last week, as noted in this press release, SIFMA became the latest group to issue a report on the shareholder communications process in an effort to influence the SEC’s proxy plumbing efforts. Given that we may well see a proxy plumbing concept release any day now from the SEC, it does come a bit late – but I imagine the report contains recommendations that it has shared with the SEC long ago…

– Broc Romanek