PCAOB Issues Interim Analysis Report on Initial Impact of Critical Audit Matter Requirements

Today the Public Company Accounting Oversight Board (PCAOB) released an interim analysis report and two accompanying white papers providing the PCAOB’s perspective on the initial impact of critical audit matter (CAM) requirements and insights learned from stakeholders.

We performed an interim analysis of the CAM requirements to gain an initial understanding of audit firms’ and engagement teams’ responses to the requirements, investors’ use of CAM communications, and audit committee and preparer experiences related to CAM implementation. Our key findings include the following:

• Audit firms made significant investments to support initial implementation of CAM requirements.
• Investor awareness of CAMs communicated in the auditor’s report is still developing, but some investors are reading CAMs and find the information beneficial.
• The staff has not found evidence of significant unintended consequences from auditors’ implementation of CAM requirements for audits of large accelerated filers in the initial year.

This interim analysis represents our first step in analyzing the CAM requirements. Through our post-implementation review program, we will continue to review the CAM requirements, including by considering all relevant costs and benefits attributable to them following a reasonable period of implementation.

Further information on CAM requirements is available on the PCAOB’s website.

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About the PCAOB

The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The PCAOB also oversees the audits of brokers and dealers registered with the Securities and Exchange Commission, including compliance reports filed pursuant to federal securities laws.