Staff Guidance Published for Implementing Auditor’s Report Changes

December 19, 2017

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 fiscal years ending on or after December 15, 2020.

Earlier this year, the PCAOB issued “The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion” and related amendments. The PCAOB will monitor implementation of this auditing standard and could issue further guidance when necessary.