Key findings of the follow-up report include:

• “The average number of CAMs per audit report has declined over time, and the proportion of audit reports that communicate a single CAM has increased.”
• “Investor awareness and use of CAMs continues to develop.”
• “The staff has not found evidence of significant unintended consequences from auditors’ implementation of the CAM requirements.”

To accompany the report, the PCAOB also released the following two staff white papers that provide “technical detail and additional information related to the methodologies by which the PCAOB gained information to support the findings in the interim analysis reports”:

• Second Stakeholder Outreach on the Initial Implementation of CAM Requirements
• Second Econometric Analysis on the Initial Implementation of CAM Requirements.

Review the report and postimplementation review page on the PCAOB’s website.

The PCAOB is proposing to replace AS 2310, The Confirmation Process, in its entirety with a new standard, AS 2310, The Auditor’s Use of Confirmation. The purpose is to strengthen and modernize the requirements for the confirmation process. In doing so, the Board noted that AS 2310 is an important standard for audit quality and investor protection, as the audit confirmation process touches nearly every audit. However, the standard was initially written over 30 years ago and has had minimal amendments since its adoption by the PCAOB in 2003.

Re­view the press re­lease and proposed new standard on the PCAOB's web­site.

Re­view the press release and Spot­light pub­li­ca­tion on the PCAOB's web­site.

Specifically, the publication discusses the Division’s observations, as well as the auditor’s responsibilities and good practices, related to four key topics: (1) fraud, (2) interim reviews of special-purpose acquisition companies (SPACs) and de-SPACs, (3) going concern, and (4) cash and cash equivalents.

Review the publication on the PCAOB's website.

The report and accompanying staff white papers providing additional technical information are available at the following links:

• Interim Analysis Report: Evidence on the Initial Impact of New Requirements for Auditing Accounting Estimates and Auditor’s Use of the Work of Specialists
• Staff White Paper: Stakeholder Outreach on the Initial Implementation of Estimates and Specialists Audit Requirements
• Staff White Paper: Econometric Analysis on the Initial Implementation of the New Specialists Requirements

Modernizing standards is one of four key strategic goals for the PCAOB. In pursuit of this goal, the Board has set one of the most ambitious standard-setting agendas in PCAOB history. Given these efforts, the role of robust economic analysis in standard setting is more important than ever for the PCAOB. Post-implementation reviews are an important component of high-quality economic analysis that the PCAOB conducts as part of standard setting to ensure that PCAOB standards are working effectively to enhance audit quality and protect investors.

The staff findings suggest that the new requirements improved auditing practices in some instances and did not result in significant increases in audit hours or audit fees. There is also no evidence of unintended consequences from auditors’ initial implementation of the new requirements. The Board plans to continue to monitor the implementation of the new requirements and their impact on the quality of audit services, as well as on audit committees, preparers, and audit firms.

Review the post-implementation review on PCAOB's website.

A reference point for audit committee members, auditors, investors, and others, this publication highlights the following selected areas of planned 2022 inspections:

• Fraud and other risks
• IPOs and M&A activity
• Audit firms’ execution challenges
• Broker-dealer-specific considerations
• Independence
• Use of service providers in the confirmation process
• Critical audit matters
• Audit areas with continued deficiencies        
• Firms’ quality control systems
• Technology

Review the publication on the PCAOB's website.

Topics covered in the report include:

1. recurrences in audit deficiencies and higher deficiency rates observed in 2021;
2. observations on quality control systems; and
3. good practices related to internal control over financial reporting, accounting estimates related to business combinations, critical audit matters, auditor independence, supervision of audits, and engagement quality review.

Review the press release and report on the PCAOB’s website.

The proposed standard, if adopted, would replace the current QC standards in their entirety and would provide a framework for a firm’s QC system that is grounded in proactively identifying and managing risks to quality, with a feedback loop from ongoing monitoring and remediation designed to drive continuous improvement. Among other provisions, the proposal would foster a more structured approach where a firm would annually evaluate its QC system and report the results of its evaluation on new Form QC.

Review the following on the PCAOB's website:

• Press release
• Proposed standard
• PCAOB Chair Erica Y. Williams' remarks on the proposal

Topics covered in the publication include:

• fraud and other risks;
• initial public offerings and mergers and acquisitions;
• audit execution;
• audit firms’ quality control systems;
• compliance with auditor independence requirements; and
• technology (e.g., auditing digital assets, responding to cyberthreats, and use of data and technology in the audit).

Re­view the publication on the PCAOB's web­site.

The PCAOB will evaluate comments received, along with other evidence obtained from the analysis, and consider whether additional guidance or other steps may be appropriate.

Review the following additional information on the PCAOB's website:

• Press release
• Request for Comment
• Auditing accounting estimates
• Using the work of specialists