The auditing industry’s chief regulator has unveiled a database to let people find out which audit firm partners work on what client engagements. Audit firms don’t relish the idea, but anyone eager for more transparency into the auditing business now has it.
The database, aptly named AuditorSearch, was launched by the Public Company Accounting Oversight Board earlier this month. It lets people look up auditing engagements by firm, company, or even audit partner name. Once you find the result you’re searching for, you can view the Form AP that audit firms must now file with the PCAOB.
Form AP identifies the engagement partner who oversees an audit. The Form AP requirement went into effect for audit reports filed after Jan. 31. Now that companies are starting to submit their 2016 annual filings to the SEC, with their audit reports in two, the Form APs are starting to arrive at the PCAOB as well.
Six months after that first filing, the firms must then add details on any other accounting firm that assisted with the audit—and with large audits of global companies, that additional work could be extensive. We’ll find out sometime in August, I suppose.
Here is one example of how AuditorSearch works, using Amazon.com as a (totally random) example. In the first image, you can see the choices you have when searching for Amazon. In the second, you see the preliminary results: that Amazon’s audit is done by Ernst & Young, and the engagement partner is David C. Heselton. From there you can view the Form AP filing directly, although it’s rather bland and text-heavy.
Compliance officers could use this database to research engagement partners you might end up working with. Knowing about their past engagements could help you refine questions you may want to pose about projects you’ll work on together, including those potentially awkward questions about prior work that ended in restatements or poor PCAOB inspection results.
More likely, activists who believe audit firms aren’t skeptical enough—and lord knows, there are plenty of activists out there who believe that—will be the power users of this database, as they needle various firms when audit clients get in the news.
Regardless, more transparency into how corporate securities filings are prepared and audited is good for investors, so AuditorSearch is a welcome addition to the Interwebs. Let’s hope it lasts.