On June 1, 2017, the Public Company Accounting Oversight Board (PCAOB) approved a new standard, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion.
This standard requires auditors to expand the audit report of public companies by including a discussion of “critical audit matters” that have been communicated to the audit committee, particularly those that involve “especially challenging, subjective, or complex auditor judgment.” Parts of this standard are testable on the CPA Exam in the first quarter of 2018.
Communication of each critical audit matter (CAM) must include the following:
Additional changes to the report include the following:
The standard is subject to approval by the SEC. Given the magnitude of the new requirements, the PCAOB is phasing in implementation:
It’s important to be aware of changes in authoritative literature which could impact how you answer the questions on the CPA Exam within that topic. Since exam material could conceivably change from one exam testing window to another, turn to Surgent for the latest updates. Our CPA Review team stays informed of all authoritative and pronouncement changes and ensures you’ll receive the news as soon as we do!
For more breaking news that could affect material on the CPA Exam, subscribe to the CPA Review blog.
Susan J. Cox, M.Acc., CPA is a Senior Technical Editor for Surgent CPA Review. Susan received her graduate and undergraduate degrees from Florida State University. Prior to joining Surgent, Susan worked as a technical editor for Thomson Reuters, an accounting instructor for the University of South Florida, a senior internal auditor for GTE, and an experienced senior auditor for Arthur Andersen & Co.
Every CPA review course tends to advertise the same selling points – smart/adaptive learning technology,…
If you choose wisely, a CPA Exam tutor can help you pass the exam quickly…
Surgent simplifies studying for the CPA Exam so you don’t have to put your life…
Everyone tells you to take the CPA Exam after graduation, but you aren’t sure where…
You have probably heard that the CPA Exam is “evolving” via the CPA Evolution effective…
Big changes are coming to the CPA Exam in 2024 because of the CPA Evolution.…