A significant deficiency in internal control over financial reporting will not automatically constitute a critical audit matter that auditors will have to disclose under a new auditing standard, but it could suggest auditors will disclose a CAM related to the underlying accounting.
That’s the word from the Center for Audit Quality regarding how auditors will interpret a new rule from the Public Company Accounting Oversight Board that requires auditors to begin disclosing CAMs in audit reports beginning in mid-2019 for the largest companies. The new rules tell auditors they must identify those matters communicated to audit committees involving material accounts or disclosures that involved especially complex, challenging, or subjective auditor judgment.
