Accounting Research Manager
Weekly Summary of Accounting, SEC and Auditing Developments: March 17 -21, 2025
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ACCOUNTING AND SEC HEADLINES
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Form AP – PCAOB Issues Staff Publication on Form AP
The PCAOB released a staff publication, Audit Focus: Form AP, that highlights the auditor’s responsibilities related to auditor reporting of certain audit participants. PCAOB staff continues to identify a large number of deficiencies related to auditors’ Form AP filings.
PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants, requires PCAOB-registered public accounting firms to file a report on Form AP for each audit report they issue for a public company that includes key information specific to the audit, such as the engagement partner, details about the audit report, and participation of other accounting firms in the audit.
This publication provides the following resources:
- Reminders regarding the definition of “other accounting firms” that participate in the audit and how to compute “total audit hours” required to determine the extent of participation; and requirements for amending a previously-filed Form AP.
- Common deficiencies the staff has observed, such as auditors omitting or inaccurately reporting information about the percentage of total audit hours another accounting firm contributed; and providing inaccurate information about the issuer, the audit firm, or the audit report date.
- Good practices the staff has observed, such as audit firms requiring use of structured templates to calculate total audit hours and ensure accurate and complete information for Form AP; training firm personnel on use of the templates and requirements of Rule 3211; and implementing a policy requiring independent review of the Form AP by a partner independent of the engagement team before filing.
Checklist – New Edition of Summary Checklist of Recent Authoritative U.S. Accounting Standards Published
We have published a new edition of our “CCH Accounting Research Manager Summary Checklist of Recent Authoritative U.S. Accounting Standards" to reflect the issuance of Accounting Standards Update (ASU) ASU No. 2025-02, Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122.
This ASU amends an SEC paragraph noted in the Codification pursuant to the issuance of SEC Staff Accounting Bulletin No. 122 which removes the text of SAB Topic 5.FF, Accounting for Obligations To Safeguard Crypto-Assets an Entity Holds for Its Platform Users.
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AUDITING AND INTERNAL CONTROLS HEADLINES
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Peer Reviews – 2025 Edition of CPAs Guide to Quality Management and Peer Reviews Published
We have updated the CPAs Guide to Quality Management and Peer Reviews. The publication provides a straightforward and practical reference for formulating a quality management system and ensuring effective regulation of all but the largest of CPA firms.
This new edition includes developing, documenting, monitoring, and remediating a system of quality management that conforms to new guidance found in:
This new edition includes developing, documenting, monitoring, and remediating a system of quality management that conforms to new guidance found in:
- Statement on Quality Management Standards (SQMS) No. 1, A Firm’s System of Quality Management.
- SQMS No. 2, Engagement Quality Reviews.
- SQMS No. 3, Amendments to QM Sections 10, A Firm’s System of Quality Management, and 20, Engagement Quality Reviews.
- Statement on Auditing Standards (SAS) No. 146, Quality Management for an Engagement Conducted in Accordance with Generally Accepted Auditing Standards.
- Statement on Standards for Accounting and Review Services (SSARS) No. 26, Quality Management for and Engagement Conducted in Accordance With Statements on Standards for Accounting and Review Services.
Form AP – PCAOB Issues Staff Publication on Form AP
As discussed above, the PCAOB released a staff publication, Audit Focus: Form AP, that highlights the auditor’s responsibilities related to auditor reporting of certain audit participants. PCAOB staff continues to identify a large number of deficiencies related to auditors’ Form AP filings.
PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants, requires PCAOB-registered public accounting firms to file a report on Form AP for each audit report they issue for a public company that includes key information specific to the audit, such as the engagement partner, details about the audit report, and participation of other accounting firms in the audit.
This publication provides the following resources:
- Reminders regarding the definition of “other accounting firms” that participate in the audit and how to compute “total audit hours” required to determine the extent of participation; and requirements for amending a previously-filed Form AP.
- Common deficiencies the staff has observed, such as auditors omitting or inaccurately reporting information about the percentage of total audit hours another accounting firm contributed; and providing inaccurate information about the issuer, the audit firm, or the audit report date.
- Good practices the staff has observed, such as audit firms requiring use of structured templates to calculate total audit hours and ensure accurate and complete information for Form AP; training firm personnel on use of the templates and requirements of Rule 3211; and implementing a policy requiring independent review of the Form AP by a partner independent of the engagement team before filing.
Preparation, Compilation, and Review Engagements – New Edition of Knowledge-Based Preparation, Compilation, and Review Engagements Published
We have published the 2025 Knowledge-BasedTM Preparation, Compilation, and Review Engagements. This toolset is designed to help the accountant efficiently and effectively perform financial statement preparation engagements, compilations, and reviews of nonpublic commercial entities in accordance with Statements on Standards for Accounting and Review Services (SSARS) issued by the Accounting and Review Services Committee (ARSC) of the American Institute of Certified Public Accountants (AICPA).
This new edition has been updated, where applicable, to take into account the latest literature, standards, and guidance applicable to preparation, compilation, and review engagements, including:
- Professional Standards issued through December 31, 2024;
- Statement on Standards for Accounting and Review Services No. 26 (SSARS-26), No. 26: Quality Management for an Engagement Conducted in Accordance with Statements on Standards for Accounting and Review Services; issued in 2022, and the AICPA Guide Preparation, Compilation and Review Engagements;
- Statement on Quality Management Standards No.1 (SQMS-1), A Firm’s System of Quality Management; and
- Statement on Quality Management Standards No. 2 (SQMS-2), Engagement Quality Reviews.
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