December 10, 2019
The new requirement for auditors to report critical audit matters (CAMs) is the most significant change to the auditor’s report in more than 70 years. To support the implementation of the new requirement, the Public Company Accounting Oversight Board (PCAOB) has conducted extensive outreach to audit firms and other stakeholders as well as issued guidance and other resource tools.
In 2019, we selected 12 audits of large accelerated filers with fiscal years ending on or after June 30, 2019, to specifically review how auditors of these filers implemented the CAM requirements. This Spotlight focuses on observations from our inspections of these new requirements and from our outreach and data analysis activities.
Consistent with the Board’s strategic goal of providing more useful and timely information, we believe that sharing our initial observations from the experiences of the first adopters of CAM requirements could help auditors, companies, audit committees, and other stakeholders. To date, only a limited number of audits have been subject to the CAM requirements. The second effective date, which impacts audits of all other companies to which the requirements apply, is for audits of fiscal years ending on or after December 15, 2020.