The Public Company Accounting Oversight Board (PCAOB) has made changes to the auditor’s report, which become effective on Dec. 15, 2017.
The changes to the auditor’s report relate to the form of the auditor’s report, the 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,” Martin Baumann, PCAOB chief auditor and director of professional standards, said. “These changes will improve the relevance and usefulness of the auditor’s report by providing additional information to investors.”
The guidance also offers an overview of the requirements regarding Critical Audit Matters (CAMs). Auditor communication of CAMs is voluntary and will not be required until June 30, 2019, (for audits of large accelerated filers) or Dec. 15, 2020, (for audits of all other companies to which the requirements apply).
The PCAOB adopted a new auditing standard, “The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion,” on June 1, 2017. It was approved by the Securities and Exchange Commission on Oct. 23, 2017.
The PCAOB also will host webinars on Dec. 12, 2017, and Jan. 10, 2018, on how to implement the recent changes to the auditor’s report.