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ARTICLE · 10 NOVEMBER 2020

PCAOB Report On Critical Audit Matters

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The Public Company Accounting Oversight Board (PCAOB) recently released an interim analysis report on the initial impact of critical audit matter (CAM) requirements (Auditing Standard No. 3101).

United StatesAccounting and Audit
Andrew Stanger
Andrew Stanger
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The Public Company Accounting Oversight Board (PCAOB) recently released an interim analysis report on the initial impact of critical audit matter (CAM) requirements (Auditing Standard No. 3101). Generally, CAM requirements are meant to identify audit matters that required especially challenging, subjective, or complex auditor judgment and to describe how the auditor responded to those matters. For large accelerated filers, the CAM requirements have applied to audits for fiscal years ending on or after June 30, 2019, and for other public companies, the requirements will apply to fiscal years ending on or after December 15, 2020.

Based on stakeholder surveys, the report notes that audit firms have not passed on their significant implementation costs to issuers and that CAM matters took on average only 1% of total audit hours. Respondents agreed that CAM requirements had not "chilled" communications with auditors, and over one-third of engagement partners reported that

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