Large accounting firms will have to submit financial statements annually to the U.S. audit regulator for the first time as part of new requirements that have faced pushback from auditors but support from many investors, The Wall Street Journal reports.
The Public Company Accounting Oversight Board voted 4-1 on Thursday to bolster the rules around firms’ reporting annually and for special circumstances, such as a filed lawsuit or private equity investment. The watchdog also voted 4-1 on a separate rule to require hundreds of firms to publicly disclose a set of eight metrics, ranging from auditor turnover to partner involvement, workload and work experience.
The moves are the latest efforts to strengthen oversight over accounting firms despite concerns that the rules would lead to additional work. The requirements, initially proposed in April, are aimed at standardizing the information provided to investors or the regulator.
The new rules are set to go into effect in 2027 if approved by the Securities and Exchange Commission.
