Audit committees may soon face pressure to increase certain areas of corporate disclosure to get ahead of “critical audit matter” disclosures that will begin appearing in audit reports in 2019.
Auditors at the largest firms are preparing to comply with a new standard that requires them to list and describe CAMs in their audit reports beginning as early as July 2019 for large accelerated filers. Firms are engaging some audit committees in pilot tests or dry runs using historic financial statements to help auditors, audit committees, and management understand how the new CAM disclosures will develop and how they may affect the financial reporting process.
