The PCOB notes that audits today generally disclose only the name of the firm that issued the audit reports. The amendments would require that the identities of other participating firms, expressed as a percentage of total audit hours, and the location and extent of any other persons or companies not employed by the auditor be disclosed.
The agency also notes that in many engagements, especially of audits of companies with multiple locations and international locations, the primary audit firm might perform only a portion of the audit while the rest of the work is done by other firms or individuals.
In many audit engagements, especially audits of companies with multiple locations and international operations, the primary audit firm may perform only a portion of the audit. The remainder of the work may be performed by other affiliated accounting firms, non-affiliated accounting firms, or other persons not employed by the auditor, such as consulting firms and individual accountants.
In fact, in many disciplinary actions announced by the PCAOB, the parties involved have often hired outside contractors and supervision of those entities has been an issue.