Newly required XBRL auditor tags effective for annual reports

The U.S. Securities and Exchange Commission (SEC) recently implemented a new requirement related to registrants’ eXtensible Business Reporting Language (XBRL) tagging of their relevant filings. The requirement can be found in an amendment to the Holding Foreign Companies Accountable Act. It is effective for Forms 10-K, 20-F and 40-F for periods ending on or after Dec. 15, 2021 (i.e., effective for registrants with a Dec. 31, 2021, year-end). Among other changes, the SEC’s final rule requires registrants to include XBRL tags for the following three items relating to the registered public accounting firm (or firms) that issues audit reports included in the filing:

• AuditorName – The name as it appears in the audit report (Baker Tilly US, LLP);
• AuditorFirmId – The identification number assigned by the Public Company Accounting Oversight Board (PCAOB) (Baker Tilly’s is 23); and
• AuditorLocation – The city and state that appear in the audit report.

The disclosure of each item must be visible and should not be disclosed within Item 9C, Disclosure Regarding Jurisdictions that Prevent Inspection.

The AuditorName and AuditorLocation can be tagged within Baker Tilly’s audit opinion. The rules do not specify where the Firm ID should be disclosed; suggested locations include:

• Item 8. Financial Statements and Supplementary Data.
  - In the index to the financial statements: Example: Report of Independent Registered Public Accounting Firm (PCAOB ID 23) 
  - This is Baker Tilly’s preferred location, as the PCAOB has not amended its reporting standards and we do not believe it would be appropriate to add the Firm ID to the audit opinion.
• Item 14. Principal Accounting Fees and Services.
• Item 15. Exhibits, Financial Statement Schedules.

XBRL tagging is a registrant’s responsibility, and independence rules preclude auditors from assisting with the preparation of the financial statements or disclosures. Registrants should consult with their securities counsel with questions about where to disclose this information or other changes required by the SEC’s final rule.

Additional guidance is available from XBRL US.

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