WASHINGTON Aug 13 A new rule that will require
accounting firms to disclose the names of individual partners
who work on company audits could be adopted as soon as
September, the top U.S. audit watchdog said Wednesday.
The rule proposed by the Public Company Accounting Oversight
Board (PCAOB) would hold auditors more accountable for their
work and let investors know who is directly in charge of
reviewing each company's books.
It was initially proposed in 2011, but remained largely
dormant until December last year when the PCAOB sought public
comment on a revised draft of the rule.
The plan got fresh attention in part thanks to a criminal
case involving a veteran KPMG auditor named Scott
London, who pleaded guilty to charges he shared confidential
details about companies he audited with a friend who used the
information to trade.
When KPMG initially disclosed it had parted ways with the
employee responsible and with two corporate audit clients,
London's identity was not immediately disclosed.
Some critics said at the time that, if the PCAOB's rule had
been in place, shareholders would have been able to check much
sooner to see which other companies London audited.
In a statement, the PCAOB said on Wednesday that Chairman
Jim Doty "will move forward with the transparency project to
disclose the name of the engagement partner in September."
Adoption of the rule will require a majority vote by the
PCAOB board. After that, it will need to be approved by the
Securities and Exchange Commission before it can go into effect.
(Reporting by Sarah N. Lynch. Editing by Andre Grenon)