Accounting & Auditing Update

As audit firms disclose who performs public company audits, gender diversity is emerging as the first major concern regarding audit engagement leadership.

Half of the largest public companies saw SOX-related audit costs rise in 2017, driven by regulatory pressure, M&A activity, and new accounting rules.

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, said the Center for Audit Quality.

After a year of reporting “key audit matters” in audit reports abroad, financial reporting has improved, says a study by a global accounting group.

Auditors have some new guidance from the PCAOB about how to begin revising their audit reports to reflect new requirements that take effect this year-end.

Half of public company board members say critical audit matters will not make audit reports more useful to investors, but instead will make their jobs more difficult.

Auditors have just been handed extensive new disclosure requirements that are largely expected to make public company audits take more time and cost more money.

If the PCAOB requires CAMs, or disclosures of critical audit matters, it will raise doubt in financial statements while protecting auditors from litigation, a new study says.