In a recently published Accounting Today article, I provided insight on the impact of the new audit report standard from the Public Company Accounting Oversight Board (PCAOB), which was approved by the Securities and Exchange Commission (SEC) on October 23. The new standard — which is the first significant change to the audit report in over 70 years – expands the scope of the audit report by requiring a discussion of “critical audit matters” and a disclosure of auditor tenure.
The new requirements could be helpful to investors in different ways. “One of the reasons cited by the commission in why it could be helpful is it may allow investors to focus their attention on the key financial reporting areas and identify areas that deserve more attention,” I explain in the article. “There’s all sorts of language in the release that says it shouldn’t be boilerplate, and you have to disclose how and why. It could be meaningful to investors to see where the focus is by the auditors.”
The full article, “PCAOB Audit Report Standard Welcomed by Investors,” was published on October 27, 2017, and is available online.