The US Council of Institutional Investors (CII) has urged the Public Company Accounting Oversight Board (PCAOB) to pursue the inclusion of an engagement partner disclosure requirement into the scope of PCAOB’s policy standards agenda.
"The Council strongly supports requiring disclosure in the auditor’s report of the name of the engagement partner," a letter to the PCAOB signed by CII general counsel Jeff Mahoney read.
According to the CII, disclosure in the auditor’s report of the name of the engagement partner would facilitate the ability of shareowners to obtain useful information about the track record of lead audit partners.
This is "information that many investors demand and deserve to know", CII continued.
The CII thereby renewed its call for engagement partner disclosure from the past, when it also objected that the PCAOB proposals did not require the audit partners to physically sign their audit reports by name.
"We would have preferred that the PCAOB require the signature of the engagement partner," a previous CII letter addressing the PCAOB stated. "However, we continue to believe the required disclosure of the name of the engagement partner has most of the potential benefits as the signature requirement."
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Previously, the PCAOB discarded the idea of requiring auditors to sign their reports on a mandatory basis; but chairman James Doty told The Accountant in a July interview he personally saw the need for the auditors to have at least an option to sign their reports.
"All the major markets, except the US have it. Auditors are living with it in most countries around the world except here," Doty said. "We’re not expecting them to sign; we are giving auditors alternatives about whether further to disclose the name."
In opposition to the investors’ view, the US audit profession showed little support for the idea of a mandatory signature on the audit reports.
"What value will it bring to the end-user to have the engagement partner physically sign the audit report with their names instead of the name of the firm," the American Institute of Certified Public Accountants vice-president firm services and global alliances Mark Koziel told The Accountant in an interview for the US country survey.
"Auditors are already doing the best job they possibly can and signing their name is not going to raise the level of quality of the audit," Koziel argued.