The saga of the PCAOB and its proposals to require identification of the audit engagement partner continues.  Compliance Week reports, based on a newly published PCAOB standard-setting agenda, that the PCAOB is now considering issuance of a supplemental request for comment in connection with yet another proposed compromise on this issue.

As you may recall, the idea of requiring the engagement partner to sign the audit report was first broached in a 2009 concept release. Investors had originally advocated that engagement partners be required to sign the audit report – similar to the signing of certifications by CEOs and CFOs and common practice in the UK—to reinforce their “ownership” of audit reports.  In 2011, the PCAOB issued its initial proposal on this issue; however, in light of comments raising concerns that a signature requirement would minimize the audit firm’s accountability and role in conducting the audit, the proposal provided only that the engagement partner be named in the audit report, but not required to sign his or her name to it. A 2013 reproposal, issued by a divided PCAOB, would have required inclusion of the name of the engagement partner in the audit report, but would not have required engagement partners to be named in firms’ annual filings with the PCAOB.  The article indicates that the comments on the reproposal were remarkably similar to those received on this topic in the past, with audit firms protesting that naming engagement partners would not improve audit quality or increase the auditor’s sense of accountability, but would still expose them to additional liability, especially because they could be deemed to be “experts” under SEC rules and might even be required to provide separate consents. (That seems, however, like an issue the SEC could address.)

Now, the article reports, the PCAOB is floating a further compromise position that would call for naming the engagement partner (and any others outside the principal audit firm who contributed to the audit) in a new, publicly available form to be filed with the PCAOB. The supplemental solicitation would ask for new comment “on how to make the filing as simple as possible while also giving investors the information they are demanding….” There was apparently some consideration given to the idea of reporting the names in firms’ annual “Form 2” filings with the PCAOB; however, that idea was problematic because the information would not be available until months after the audit.

The idea of a new form seems to be drawing the PCAOB’s dissenters back into the fold. One PCAOB member who previously had objected to the manner of disclosure in the prior proposal, although not to the concept of transparency, indicated in the article that he was supportive of the idea, now that the PCAOB was “’talking more about a form-based solution.’”

But don’t think that’s the end of the story: from the published agenda, it also appears that the PCAOB is considering issuing a reproposal of the “Auditor’s Reporting Model.”