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SEC approves PCAOB standard requiring changes to the auditor’s report

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Oct 23, 2017

On October 23, 2017, the Securities and Exchange Commission (SEC) approved a PCAOB standard that significantly modifies the auditor’s reporting model.

The new auditor reporting standard retains the current “pass/fail” approach of the existing auditor’s report; however, it substantially increases the information auditors must include in the auditor’s report.

In the SEC’s statement announcing its approval of the standard, Chairman Jay Clayton stated the following:

I strongly support the objective of the rule to provide investors with meaningful insights into the audit from the auditor. CAMs are designed to provide investors and other financial statement users with the auditor’s perspective on matters discussed with the audit committee that relate to material accounts or disclosures and involved especially challenging, subjective, or complex auditor judgment. Investors will benefit from understanding more about how auditors view these matters

Review the new auditor reporting standard; the SEC’s statement and release approving the standard on the PCAOB’s website.

Also, review our article and Heads Up on the standard.

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