COVID-19 resources site
The CAQ continues to update its COVID-19 resources page, which brings together resources from various sources to provide management, audit committees, auditors, and investors information to help them understand the impact of the coronavirus on financial reporting and oversight responsibilities.
CAQ reports on CAMS analysis
The CAQ released, on Dec. 3, 2020, a report, “Critical Audit Matters: A Year in Review,” providing data and analysis on the first year of including CAMs in auditor reports. The CAQ report revealed that CAMs for S&P 100 companies focused on some of the most complex accounting issues that require a high degree of judgment by the auditor and that the four most common areas were income taxes, goodwill and intangibles, other contingent liabilities, and revenue. Additionally, the average number of CAMs included in the auditor reports for the S&P 100 companies was 1.98 CAMs per report.
CAQ releases perspectives on management review controls
On Nov. 18, 2020, the CAQ and the Financial Education & Research Foundation of Financial Executives International released “Perspectives on Management Review Controls: Challenges and Solutions” for preparers, auditors, and regulators. It includes information on issues surrounding the design, execution, and documentation of management review controls. Insights are based on interviews with audit engagement teams and accounting personnel that are involved in management review controls that include a significant degree of subjective management judgment. The report provides key findings, identifies challenges, and offers suggested actions for preparers, auditors, and regulators.
CAQ releases annual audit committee transparency report
On Oct. 13, 2020, the CAQ and Audit Analytics issued the “2020 Audit Committee Transparency Barometer,” which tracks S&P 1500 proxy disclosures to evaluate transparency regarding audit committee oversight of the external auditor and other important financial reporting topics.
This edition reports positive trends in audit firm evaluation and supervision and in disclosures of risk oversight in cybersecurity, COVID-19, and discussion of CAMs. However, disclosures related to auditor compensation and explanations for changes in fees paid to the external auditor have remained stagnant and provide opportunity for improvement. The publication also provides disclosure examples.