The US Public Company Accounting Oversight Board (PCAOB) has introduced new rules requiring large accounting firms to submit annual financial statements and disclose key audit quality metrics.
These measures aim to enhance transparency and oversight. The PCAOB voted 4-1 on both rules, which will take effect in phases starting in 2027, pending approval by the Securities and Exchange Commission (SEC). The approval was made despite objections from audit firms citing increased costs and administrative burdens.
Under the new rules, firms with over 200 annual audit reports and more than 1,000 audit staff—such as Deloitte, Ernst & Young, PwC, KPMG, BDO, and Grant Thornton—must confidentially report financial statements, ownership details, private equity investments, and significant financial risks. Separately, they must disclose cybersecurity policies and significant incidents within five business days.
The second rule mandates the public disclosure of metrics relating to audit quality at the firm and engagement level, including auditor turnover, partner involvement, workload, and training hours. Firms must also report staff retention and audit restatement history only at the firm level. These requirements target firms auditing clients with at least $100 million in revenue and a $75 million public float.
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