Staff Guidance Published for Implementing Auditor’s Report Changes
New staff guidance by the Public Company Accounting Oversight Board (“PCAOB”) details updates to the auditor’s report that will be effective for audits during fiscal years ending on or after December 15, 2017. Released on December 4, the staff guidance covers critical changes to the auditor’s report, including the disclosure of auditor tenure and a statement on auditor independence. Also covered under the guidance are requirements concerning Critical Audit Matters (“CAMs”). Auditors can communicate CAMs voluntarily, but auditor communication will be required for audits of large accelerated filers for fiscal years ending on or after June 30, 2019. For all other inspections, the requirement is effective for. Read More.
SEC Approves Updates to Auditor’s Report
The Securities and Exchange Commission (“SEC”) has unanimously approved an audit reporting standard by the Public Company Accounting Oversight Board requiring significant improvements to certain public company reports. Such improvements aim to make the auditor’s report more informative and address the communication of critical audit matters (“CAMs”) and disclosures concerning auditor tenure. The new auditor’s report is expected to offer investors meaningful insight regarding audits, such as important estimates and judgments, substantial unusual transactions, and other potential risk areas for an organization. Speaking on the objective of the auditing standard, SEC Chairman Jay Clayton said investors will benefit from a. Read More.
IAASB Supports PCAOB’s Re-Proposed Auditing Standard
In a statement issued on May 23, the International Auditing and Assurance Standards Board (“IAASB”) announced its support of the Public Company Accounting Oversight Board’s (“PCAOB”) proposed auditing standard , The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion. This is the second time the audit regulator has issued the proposal, which would require auditors performing audits under the PCAOB’s standards to disclose in the auditor’s report details regarding critical audit matters. Read the IAASB’s statement in support of the PCAOB’s re-proposal on the International Federation of Accountants website.
PCAOB Updates Proposed Auditor Reporting Standard
The Public Company Accounting Oversight Board (“PCAOB”) has reissued a proposal to require additional information about critical audit matters in the auditor’s report. Updated from the 2013 version, the new proposal includes the standard, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, as well as amendments related to other PCAOB standards. The 2016 proposal also retains the current auditor report’s pass/fail model and carries forward the concept of critical audit matters from the 2013 version. Refinements to the proposal include: Restricting possible critical audit matters to matters communicated or that should be. Read More.
PCAOB Still Focused on Expanding Auditor Report
As the Public Company Accounting Oversight Board (“PCAOB”) continues work on a revised proposal to expand the auditor’s report, PCAOB Chairman James Doty expressed confidence that the finished product will be more useful to investors. At a recent conference in Washington, D.C., Doty told a group of institutional investors that the audit report’s new format should give them better insight into what challenges auditors face and how such issues impact a company’s financial statements. The PCAOB has made efforts to improve the auditor’s report for several years. A revised proposal is expected to be issued based on Release No. 2013-005,. Read More.