PCAOB Publishes Staff Guidance on Implementing Changes to Auditor's Report
Washington, Dec. 4, 2017
The Public Company Accounting Oversight Board today published staff guidance
that describes changes to the auditor's report that become effective
for audits for fiscal years ending on or after December 15, 2017.
The guidance addresses key changes to the auditor's report required
this year, such as the form of the auditor's report, disclosure of
auditor tenure, a statement on auditor independence, and a required
explanatory paragraph on Internal Control Over Financial Reporting
(ICFR) in certain circumstances.
"This guidance was prepared to help firms as they implement the first
phase of changes to the auditor's report," said Martin F. Baumann,
PCAOB Chief Auditor and Director of Professional Standards. "These
changes will improve the relevance and usefulness of the auditor's
report by providing additional information to investors."
On June 1, 2017, the Board adopted a new auditing standard, "The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion"(AS 3101) and related amendments. These were approved by the Securities and Exchange Commission on October 23, 2017.
The guidance also provides a high-level overview of the requirements
regarding Critical Audit Matters (CAMs). Auditor communication of CAMs
is permissible on a voluntary basis but will not be required until
audits of fiscal years ending on or after June 30, 2019 (for audits of
large accelerated filers) or December 15, 2020 (for audits of all other
companies to which the requirements apply).
The PCAOB plans to monitor the implementation of the standard and may issue additional guidance, as needed.
The PCAOB also will host two webinars, on December 12, 2017, and January 10, 2018, on the implementation of recent changes to the auditor's report, which will include matters covered in this guidance.