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PCAOB plans final action on new audit report

Tammy Whitehouse | November 30, 2016

The Public Company Accounting Oversight Board expects to meet in December to vote on a final standard that would require auditors to dramatically expand the current audit report to include discussion of critical audit matters. While retaining and elevating the auditor’s current pass-fail determination on whether a company’s financial statements are fairly presented, the expanded audit report also will include new language explaining the auditor’s responsibilities, independence, and tenure as the company’s external auditor.

The PCAOB began working on the overhaul of the current boilerplate audit report with a concept release in 2011 that explored the possibility of requiring auditors to include a kind of “auditor discussion and analysis” in each audit report. After much outcry, the PCAOB tailored and narrowed that idea to propose in 2013 requiring auditors to explain “critical audit matters” that arose in the course of an audit.

The PCAOB further refined the CAM...

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