ASSIGNMENT
3-27 (OBJECTIVES 3-3) PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants, requires that an audit firm file a form, referred to as Form AP, for each initial issuance of an audit
report. On Form AP, the audit firm discloses the name of each audit engagement partner
who participated in the audit, as well as the names and locations of any other audit firms
participating in 5 percent or more of the audit engagement. The total number of audit firms
participating in less than 5 percent of the audit engagement, as well as the overall percentage
of audit hours contributed by these firms, are also required to be disclosed. Access the text-
book website to obtain the file “PCAOB Form AP Data” that includes data obtained from the
PCAOB’s AuditorSearchSM database and the related data dictionary. Sort the dataset by fiscal
period date to obtain the subset of Form AP filings for audits of financial statements that had
a fiscal year end anytime during 2017 to complete the following:
a. How many Form APs relate to 2017 audits?
b. What is the name of the individual who served as the engagement partner for Nordstrom
Inc.? What other engagement(s) did that individual also serve as engagement partner?
c. Which global audit firm had the highest number of Form AP filings for 2017 audits
(Note: Some of the global firms have more than one firm ID number)? How many
Form APs were filed by that firm on a global basis? How many of those Form APs
relate to the U.S.-based practice of that firm?
d. For which firm did Joseph D’Introno work in 2017? How many AP forms were filed for him
for 2017 audits? What type of public company audit clients did he mostly serve in 2017?
e. How many Form APs relate to partners in the Atlanta Office of Ernst & Young, LLP?
3-28 (OBJECTIVES 3-3, 3-9) The PCAOB’s recently revised auditor reporting standard includes a
requirement for the auditor to communicate critical audit matters. Critical audit matters include
those matters during the audit that involved difficult, subjective, or complex auditor judgments
or that posed difficulty to the auditor in obtaining sufficient appropriate evidence or in forming
the opinion on the financial statements. Similarly, the International Auditing and Assurance
Standards Board (IAASB) recently revised the auditor’s report in the ISAs to require auditors
to communicate key audit matters. Key audit matters include communication of similar kinds of information as noted by the PCAOB such as areas of higher assessed risk of material misstatment and the effects of significant events or transactions that occurred during the period.
a. Describe how users of the financial statements may benefit from communications
about these matters in an audit report.
b. Describe how communication of these matters may not be beneficial to users of the
financial statements.
c. What difficulties, if any, may auditors face in communicating about these matters?
3-29 (OBJECTIVES 3-1, 3-3, 3-7, 3-9) The IAASB recently revised its standards related to audit
reporting. ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements, re-
quires the auditor’s report to include the following paragraphs under the headings “Basis
for Opinion” and “Auditor’s Responsibilities for the Audit of the Financial Statements”:
