In an investor-friendly decision that deputizes auditors with new duties, the Securities and Exchange Commission has given final approval to a new rule that dramatically expands the standard public company audit report.
The SEC approved with no changes a new auditing standard developed and adopted by the Public Company Accounting Oversight Board that requires auditors to list and describe “critical audit matters” arising during each public company audit. In a formal statement accompanying the SEC approval, which is required under Sarbanes-Oxley before PCAOB standards can take effect, SEC Chairman Jay Clayton said he “strongly supports the objective of the rule to provide investors with meaningful insights into the audit from the auditor.”
