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Auditors prepare for PCAOB audit reporting changes

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Oct 04, 2017

On October 4, 2017, Accounting Today released an article on how companies and their auditors are getting ready for the Public Company Accounting Oversight Board’s new audit reporting model, despite uncertainty over whether the Securities and Exchange Commission will approve the new standard.

The PCAOB voted for the new standard in June after years of work and a series of proposals that attracted extensive industry feedback. The SEC has not yet approved the standard, although it typically has rubberstamped any new rules approved by the PCAOB. In this case, however, the U.S. Chamber of Commerce has lined up 27 major corporations and business groups in urging the SEC to reject it. They argue that the discussion of so-called “critical audit matters,” or CAMs, that the new standard would require in audit reports could “result in the disclosure of immaterial information, replace management as the source of original information, create a chilling effect on the audit committee—auditor relationship, create liability for businesses and auditors, and impose additional expenses on firms.”

Last week, PCAOB board member Jeanette Franzel discussed the expanded audit report standard with a panel of auditing experts at an event sponsored by the New York State Society of CPAs. “The real question is transparency,” she said. “How much should the auditor say and how much information do people want from the auditor, from this oftentimes long process filled with a lot of work? The PCAOB has been working on this for a very long time.”

Review the article on Accounting Today's website and a video on the New York State Society of CPAs's page.

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