On June 1, 2017, the Public Company Accounting Oversight Board (PCAOB) adopted a new auditor reporting standard, subject to approval by the Securities and Exchange Commission (SEC), which will require more information about the audit to be included in the auditor’s report. While the proposal retains the audit report’s current "pass/fail" model, it introduces several significant changes including:
- Requiring a description of critical audit matters (CAMs) arising from the audit of the current period’s financial statements
- Clarification of the auditor’s role and responsibilities related to the audit
- Standardization of the form of the auditor’s report
The PCAOB has issued a
fact sheet detailing the changes of the new standard, including effective dates should the proposal be approved by the SEC.
On July 21, the SEC posted a notice of filing of Proposed Rules on The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion to the Federal Register. The document is open for public comment through August 18th. The SEC will consider feedback received prior to making a decision on the standard.
FEI’s Committee on Corporate Reporting (CCR) will comment on the proposed rule change, and will detail the potential impact the proposal would have on the preparer community.