- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
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.
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Large accelerated filers saw an average of 1.8 issues called out as critical audit matters in their first round of reporting, according to a new analysis.
Among the first to disclose critical audit matters, Microsoft’s auditor, Deloitte, identifies revenue recognition and uncertain tax positions as CAMs.
Audit reports are about to get a lot longer, and companies would be wise to give financial statement users some advance warning to head off any knee-jerk reactions.
