December 21, 2016

The Public Company Accounting Oversight Board’s latest regulation, requiring firms to disclose the lead engagement partner on an audit, will benefit investors and regulators tremendously, according to a recent study.

The study, performed by experts from the University of New South Wales Australia, analyses financial reports made by hundreds of Australian companies in a nine-year period.

The findings indicate that the identification of the engagement partner “uniquely enables investors and regulators to identify interlocking networks likely to impair audit quality,” according to Gary S. Monroe, one of the authors of the study.

The new disclosure rule will become effective at the end of January.